7 JULY 1950, Page 9

The " motor covenant " case decided by Mr. Justice

Humphrey lait Friday raises issues of considerable interest ; as the case is going to appeal I must confine myself to stating them. A Lloyds underwriter ordered from a dealer a Rolls Royce and a Bentley, with a view to selling both second-hand at a profit—apparently a side-line with some advantages. The Rolls Royce was delivered to him, and he made £1,000 on it. The dealer then declined to supply the Bentley unless the underwriter signed the covenant, under a well-known scheme which had effect from August 15th, 1946, whereby the purchaser of a new car undertakes not to sell it within six months (since extended, I believe, to twelve months). The would-be purchaser declined to sign, and the learned Judge pronounced in his favour on the ground, primarily, that the con. tract of sale was signed in June, 1946, two months before the covenant scheme took effect. Various questions—such as whether the purchase of new cars simply in order to re-sell them at a higher price second-hand is a laudable practice—are left unsettled. But the arguments in the Court of Appeal will be studied with interest.