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Stabilad Ltd v Stephens & Carter Ltd

285 words (1 pages) Case Summary

26th Jun 2019 Case Summary Reference this In-house law team

Jurisdiction / Tag(s): UK Law

Stabilad Ltd v Stephens & Carter Ltd (No. 2) [1999] 2 All ER (Comm) 651

Contract law – Formation of contract – Implied terms


S and SC began negotiations for the sale of rights in a device which stabilised ladders. SC sent S a document which provided for further negotiation with regards to S’ exclusive rights on the intellectual property of the product. In return, SC would pay a yearly royalty. SC also stated that they would make a further payment of £400,000, split over two occasions on the completion of certain stages of marketing and advertising the product. SC later found that a competitor had created a similar product and wrote to S stating that they had proceeded on the unique nature of S’ product. They attempted to claim that the document was not legally binding and that S had not completed one of the stages in the agreed timeframe. S claimed for the money owed by SC.


The court at the initial stage was satisfied that S had completed the contract prior to SC finding their rival’s product and subsequently held that SC was required to pay S the payment previously agreed. SC appealed the decision. Therefore, it was important for the court to understand whether the communication between S and SC created a binding contract between the parties.


The court allowed SC’s appeal. They found that the terms of the agreement could not be satisfied until SC had informed S they wished to proceed. In this case, the court found that this would have been indicated by the payment of the lump sum to S, or by entering into a further contract.

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UK law covers the laws and legislation of England, Wales, Northern Ireland and Scotland. Essays, case summaries, problem questions and dissertations here are relevant to law students from the United Kingdom and Great Britain, as well as students wishing to learn more about the UK legal system from overseas.

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