Nordenfelt v Maxim Nordenfelt Guns and

Ammunition Co Ltd
Nordenfelt v Maxim Nordenfelt Guns and Ammunition Co Ltd [1894] AC 535 is a
Nordenfelt v Maxim
19th-century English case decided by the House of Lords. The dispute was about restraint of
Nordenfelt Guns and
trade, and the judgment declares when such a restraint (which is prima facie void) may
Ammunition Co Ltd
become valid.

The case also established the "Blue pencil doctrine" as a method for deciding whether
contractual obligations can be partially enforced when the obligation as drafted in the
contract has an element of illegality.

Contents
Facts Court House of Lords
Judgment Citation(s) [1894] AC 535
See also Transcript(s) judgment (http://ww
Notes w.uniset.ca/other/cs
External links 6/1894AC535.html)
Court membership
Judge(s) Lord Macnaghten,
Facts sitting Lord Watson Lord
Thorsten Nordenfelt, a manufacturer specialising in armaments, had sold his business to Herschell, Lord
Hiram Stevens Maxim. They had agreed that Nordenfelt ‘would not make guns or Ashbourne Lord
ammunition anywhere in the world, and would not compete with Maxim in any way for a Morris
period of 25 years’. Keywords
Restraint of trade, competition law,
Judgment illegality

The House of Lords held that the restraint was reasonable in the interests of the parties. They placed emphasis on the £200,000
that Thomas Nordenfeldt had received as full value for his sale.[1] Restraint of trade clauses were prima facie void at common
law, but they may be deemed valid if three conditions are met:

the terms seek to protect a legitimate interest

the terms are reasonable in scope from the viewpoint of the parties involved
the terms are reasonable in scope from the viewpoint of public policy.
The question on severability was whether the reasonable restriction could be enforced when it was in the same contract as an
unreasonable and unenforceable restriction. The court used the test of whether striking out (with a blue pencil) words containing
unreasonable provisions would leave behind a contractual obligation that still made sense. If it did, then the amended contract
would be enforced by the court.

In this case, the unreasonable restraint was severable, and the court enforced the amended agreement that Nordenfelt "for the
next 25 years, would not make guns or ammunition anywhere in the world , and would not compete with Maxim in any way" thus
permitting him to trade in those very items in direct competition with Maxim, illustrating the limited practical utility of the rule
under its strike-out only stricture.

See also
Restraint of trade
English contract law

Notes
1. [1894] AC 535

External links
NSW Law Reform Commission. Working Paper 4 (1969) - Covenants in Restraint of Trade (http://www.lawlink.nsw.gov.au/lrc.
nsf/pages/WP4REPORT)
 NORDENFELT vs THE MAXIM NORDENFELT GUNS AND AMMUNITION COMPANY, LIMITED (http://www.uniset.ca/other/
cs6/1894AC535.html)

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This page was last edited on 24 September 2018, at 16:19 (UTC).

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