Rose & Frank Co v JR Crompton & Bros Ltd [1925] AC 445

Facts

  • Rose & Frank Co was appointed as the sole US distributor for JR Crompton & Bros Ltd, a British paper manufacturer.
  • The parties entered into a written agreement which included an "honour clause" explicitly stating that the arrangement was not a formal or legal agreement and would not be subject to legal jurisdiction in the courts of the US or England.
  • The clause specified that the agreement was a record of mutual trust and good faith, with no intention that it be legally binding.
  • Crompton terminated the agreement without notice, leading to a dispute over whether any enforceable contract existed between the parties.

Issues

  1. Whether the inclusion of an "honour clause" in a commercial agreement can negate the presumption of intention to create legal relations.
  2. Whether the agreement between Rose & Frank Co and JR Crompton & Bros Ltd was legally enforceable notwithstanding the honour clause.
  3. How clear contract wording interacts with the general presumptions regarding legal enforceability in business arrangements.

Decision

  • The House of Lords ruled that the honour clause was sufficient to negate the usual presumption of intention to create legal relations in commercial agreements.
  • The court recognized the right of parties to decide, via express terms, whether an agreement is to be legally binding.
  • It held that, in the presence of a clear honour clause, courts will not enforce the agreement as a contract under law.

Legal Principles

  • The intention to create legal relations is a fundamental element required to form a legally binding contract.
  • Business agreements usually carry a strong presumption of such intention, but this can be rebutted by clear and unambiguous language to the contrary.
  • An expressly worded honour clause can remove contractual intent even in a commercial context.
  • Courts will consider both the context and explicit terms of agreements to determine legal effect.

Conclusion

Rose & Frank Co v JR Crompton & Bros Ltd established that a clearly drafted honour clause can effectively exclude the intention to create legal relations in a business agreement, preventing the arrangement from being legally enforceable despite the usual commercial presumption. This case highlights the importance of precise contract language in reflecting the genuine intent of the parties.

The answers, solutions, explanations, and written content provided on this page represent PastPaperHero's interpretation of academic material and potential responses to given questions. These are not guaranteed to be the only correct or definitive answers or explanations. Alternative valid responses, interpretations, or approaches may exist. If you believe any content is incorrect, outdated, or could be improved, please get in touch with us and we will review and make necessary amendments if we deem it appropriate. As per our terms and conditions, PastPaperHero shall not be held liable or responsible for any consequences arising. This includes, but is not limited to, incorrect answers in assignments, exams, or any form of testing administered by educational institutions or examination boards, as well as any misunderstandings or misapplications of concepts explained in our written content. Users are responsible for verifying that the methods, procedures, and explanations presented align with those taught in their respective educational settings and with current academic standards. While we strive to provide high-quality, accurate, and up-to-date content, PastPaperHero does not guarantee the completeness or accuracy of our written explanations, nor any specific outcomes in academic understanding or testing, whether formal or informal.
No resources available.

Job & Test Prep on a Budget

Compare PastPaperHero's subscription offering to the wider market

PastPaperHero
Monthly Plan
$10
Assessment Day
One-time Fee
$20-39
Job Test Prep
One-time Fee
$90-350

Note the above prices are approximate and based on prices listed on the respective websites as of May 2025. Prices may vary based on location, currency exchange rates, and other factors.

Get unlimited access to thousands of practice questions, flashcards, and detailed explanations. Save over 90% compared to one-time courses while maintaining the flexibility to learn at your own pace.

All-in-one Learning Platform

Everything you need to master your assessments and job tests in one place

  • Comprehensive Content

    Access thousands of fully explained questions and cases across multiple subjects

  • Visual Learning

    Understand complex concepts with intuitive diagrams and flowcharts

  • Focused Practice

    Prepare for assessments with targeted practice materials and expert guidance

  • Personalized Learning

    Track your progress and focus on areas where you need improvement

  • Affordable Access

    Get quality educational resources at a fraction of traditional costs

Tell Us What You Think

Help us improve our resources by sharing your experience

Pleased to share that I have successfully passed the SQE1 exam on 1st attempt. With SQE2 exempted, I’m now one step closer to getting enrolled as a Solicitor of England and Wales! Would like to thank my seniors, colleagues, mentors and friends for all the support during this grueling journey. This is one of the most difficult bar exams in the world to undertake, especially alongside a full time job! So happy to help out any aspirant who may be reading this message! I had prepared from the University of Law SQE Manuals and the AI powered MCQ bank from PastPaperHero.

Saptarshi Chatterjee

Saptarshi Chatterjee

Senior Associate at Trilegal