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Re British Basic Slag Ltd’s Agreements

[1963] 2 All ER 807



Eight steel companies owned BBS shares

Each entered into a separate (but identical) agreement with BBS to sell to it all its slag and not to sell to anyone else without the consent of BBS.

Prior to entering into the agreements, drafts had been distributed to the companies and they had been discussed in meetings.


The issue

Did the agreements require registration under the UK RTP Act which captured arrangements “between two or more persons” “under which restrictions are accepted by two or more parties”. The parties alleged that they had not reached agreements between themselves - only a series of separate vertical agreements with BBS - and therefore there was no agreement in which two or more parties accepted restrictions.


Diplock LJ

Arrangement ‘bears the meaning that an ordinary educated man would ascribe to it’. It involves a meeting of the minds and mutuality such that each party would consider itself under a legal or moral obligation to do or not do a certain thing.

Note, this Act specifically required a restriction be accepted by two or more parties - the TPA imposes no such requirement and consequently the current view in Australia appears to be that mutuality is not a requirement

Agreement requires that ‘parties to it should have communicated with one another … and that as a result … each has intentionally aroused in the other an expectation that he will act in a certain way.’

In this case there was knowledge from board meetings that each member would enter into a contract and this induced them to do so

“If this is not an ‘arrangement’ I do not know what is”

  • "That it was pure coincidence [that each member entered into agreement on identical terms] offends credulity"