{"id":13854,"date":"2023-07-05T18:55:09","date_gmt":"2023-07-05T18:55:09","guid":{"rendered":"https:\/\/careerinlaw.net\/uk\/?p=13854"},"modified":"2023-11-23T09:44:07","modified_gmt":"2023-11-23T14:44:07","slug":"case-summary-esso-petroleum-v-commissioners-of-custom-excise-1976-1-wlr-1","status":"publish","type":"post","link":"https:\/\/careerinlaw.net\/uk\/case-summary-esso-petroleum-v-commissioners-of-custom-excise-1976-1-wlr-1","title":{"rendered":"Case Summary: Esso Petroleum v Commissioners of Custom Excise 1976 1 wlr 1"},"content":{"rendered":"\n<h2 class=\"wp-block-heading\" id=\"h-legal-principles-and-key-points\"><strong>Legal Principles and Key Points<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The case of Esso Petroleum v Commissioners of Custom Excise 1976 1 wlr 1 reaffirms the principle that when an agreement is made in a commercial context there is a presumption of the intention to create legal relations, as established in the case of Carlil v Carbolic smoke ball company 1893 1 QB 256<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>A sales promotion does not equate to a mere puff.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Section 1 (S1) of the Sales of Goods Act 1893<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Schedule 1 (Sch1), Group 25 of the Purchase Tax Act 1963<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Facts of the Case<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The claimant (C), a petrol company named Esso Petroleum Ltd, owned petrol stations that ran a promotion in connection with the World Cup. The claimants offered a promotional coin with an engraved image of a footballer to customers who bought more than 4 gallons of petrol from any of their stations.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Under the provisions of the Purchase Tax Act 1963, the defendants, the customs and Excise commissioner argued that the coins were taxable as goods \u201cproduced in quantity for general sale\u201d (sch1, group 25 of the 1963 Act) under an alleged contract of sale.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Alternatively, the claimants argued that the coins were not taxable because they were not produced for \u2018general sale,\u2019 and by offering the coins to the customers, the claimants believed this to entail that they did not intend to be legally bound by any contract (= no sale)&nbsp;<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Issues in Esso Petroleum v Commissioners of Custom Excise 1976 1 wr 1<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The claimants sued, claiming the coins were chargeable to purchase tax as there was a contract of sale.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The issue in question here was whether the distribution of the coins, were goods for general sale, thus sold per a legal obligation bestowed on Esso, the claimants, to supply the coins under a contractual relationship with customers.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Held by the House of Lords<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The House of lords declared that the coins were exchanged under a contract, however, they were not chargeable for tax.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Lord Simon<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The promotion created areas of commercial advantages that were not favoured or sided with by UK courts, to allow a commercial promoter to claim that the promotion is mere puff. \u2013 Carlill v Carbolic Smoke Ball Company 1893 1 QB 256<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>In English law, there\u2019s a presumption of an intention to create legal relations where agreements are made in commercial settings\/contexts. Thus, the court held there was an intention to create legal relations by Esso to supply the coins.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>For a contract of sale, there must be a transfer of the goods for monetary consideration. Despite establishing an intention to create legal relations, there was no consideration for transferring the coins, because the coins were transferred under a separate contract of sale to the petrol.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Because the consumer did not buy the coins for \u2018money consideration,\u2019 the contract for obtaining a coin was not a sales contract, so the tax was not applicable<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Legal Principles and Key Points Facts of the Case Issues in Esso Petroleum v Commissioners of Custom Excise 1976 1 wr 1 Held by the House of Lords Lord Simon<\/p>\n","protected":false},"author":7,"featured_media":13103,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[23],"tags":[],"class_list":["post-13854","post","type-post","status-publish","format-standard","has-post-thumbnail","category-case-summaries","entry"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v24.4 (Yoast SEO v27.9) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Case Summary: Esso Petroleum v Commissioners of Custom Excise 1976 1 wlr 1 | Careerinlaw.net | UK<\/title>\n<meta name=\"description\" content=\"The case of Esso Petroleum v Commissioners of Custom 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