CONTRACT
Print publishing
Author-publisher contract - terms of contract uncertain - conditional contract created on telephone
Malcolm v Chancellor, Masters and Scholars of the University of Oxford
Court of Appeal
18 December 1990
Mustill, Nourse, Leggatt LJJ
Facts: Mr Andrew Malcolm had submitted a first draft of a book to Oxford University Press (OUP). Mr Hardy, the Senior Editor in the General Books Department of OUP, outlined certain anxieties about the book. Mr Malcolm suggested revisions but sought a firm commitment from OUP to publish before re-writing.
On 20 May 1985 Mr Hardy spoke to Mr Malcolm on the telephone and offered such a commitment, conditional only on Mr Malcolm's revisions not making the book worse: it was common ground at the trial that the revisions had improved the book. At the end of the conversation, the parties agreed that no advance would be paid to Mr Malcolm, but that he should have a fair royalty so that if the book were a success he would do well out of it.
Two months later the Managing Director of OUP wrote to Mr Malcolm revoking Mr Hardy's decision. He wrote '...I know that you propose working on the latter, but we would have to see the final typescript and have it fully refereed before committing ourselves to publish. Even then there would be considerable commercial and sales problems and I cannot hold out much hope that we would publish'. Mr Hardy was given a written warning by OUP for indicating to Mr Malcolm that the book would be published without seeking prior editorial approval.
At a very late stage in the action OUP sought to plead that Mr Hardy had acted without authority. The trial judge rejected this late application.
Issues: Had OUP made a conditional commitment to publish the book? If so, was the condition met? Was there a binding contract to publish the book?
Held: In March 1990 Mr Gavin Lightman QC sitting as Deputy Judge held that there was no legally enforceable contract. In his view the commitment made by OUP omitted too many essential terms for a completed contract to be formed, for example, how many copies were to be printed, at what price and yielding what royalty. If simply one term was missing it might be possible for the court to supply the reasonable term but in this case too many terms were missing. ([1990] 4 ENT LR E-65)
Mr Malcolm appealed to the Court of Appeal where it was held by a majority (Mustill LJ dissenting) that there was an enforceable contract.
Nourse LJ stated that the publisher and author had two distinct functions. The author's function is to produce the raw material of a script. The publisher's function is to present and promote that material in such a way that it will be widely acquired by the reading public. In this case, although the form of the contract was unusual, it was not a contract which the law regarded as incomplete. The contract simply requires the publisher to perform his distinct function, leaving to him the decision of all questions of presentation and promotion, subject only to the requirement that he must act in good faith towards the author. Accordingly there was no need for agreement on questions of print run, hardback versus paperback, sale price and so forth.
The effect of the telephone conversation on 20 May 1985 was to create a conditional contract for the publication by OUP of Mr Malcolm's book, Mr Malcolm to receive a royalty at a rate to be agreed, or in default of agreement, at a fair rate. The condition (that the revisions should not make the book worse) having since been satisfied made the contract enforceable by Mr Malcolm.
BMN