L Schuler AG v Wickman Machine Tool Sales Ltd [1974] AC 235

Schuler appointed Wickman to distribute its machinery. The agreement required representatives to make regular weekly visits to specified customers and described that obligation as a condition. It also contained provisions addressing breaches and termination. Wickman failed to make all the required visits. Schuler argued that the failures entitled it to end the agreement, relying on the status assigned to the obligation. The dispute reached the House of Lords, where the central question was whether the label condition carried its strict technical consequence when read with the remainder of the contract.

Did describing the weekly-visit obligation as a condition mean that any breach entitled Schuler to terminate, when the provision was read in the full contractual context?

The House of Lords majority held that the weekly-visit provision was not a condition in the technical sense that any breach justified termination. The agreement did call it a condition, which was significant, but the meaning of that label had to be read with the contract as a whole, including its machinery for dealing with breaches. Treating every missed visit as an immediate termination trigger would produce a drastic result requiring clearer support in that context. Schuler's asserted right to terminate therefore failed. Lord Wilberforce dissented, placing greater weight on the parties' chosen wording and insistence on regular performance. The majority did not hold that courts can disregard clear conditions simply because they seem strict.

Calling an obligation a condition is strong evidence of its intended status but not invariably conclusive. The term must be construed in the whole agreement. If the context shows a different meaning, every breach will not necessarily carry the technical right to terminate.

Schuler is valuable alongside Hong Kong Fir and cases giving effect to clearly agreed conditions. It prevents reliance on a single label without examining the rest of the document, while the dissent warns against replacing the parties' commercial priorities with judicial preferences. A condition remains a type of contractual term; the distinction is not condition versus term as mutually exclusive categories. Identify the consequence the parties attached to breach and reconcile it with any notice or cure provisions.