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Datica Cola Case Study

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M/s Gujarat Bottling Company Ltd. & Others v/s The Coca Cola Co. & Others, Supreme Court of India Introduction: In 1993 Gujarat Bottling Company entered into an agreement with Coca cola in which Coca Cola authorized and permitted GBC, to prepare, bottle and sell brands of Coca Cola, but not to be related with any other brand during the agreement and a notice period of 1 year to be provided for the termination of agreement. Coca Cola had the right to stop supplying GBC with raw materials in the event of transfer of control of GBC without the prior express consent of Coca Cola. This agreement was to grant GBC license by Coke to prepare, bottle and sell Coca Cola. In 1994, GBC entered into another agreement with Coca Cola to register the agreement under the statute as …show more content…

GBC approached court and the main concerns for the court was to determine if the agreement in 1993 was substituted by the argument in 1994 and whether the agreement in 1993 was an agreement in restraint of trade under the section 27 of Indian Contract Act, hence should be considered as void. 2. Under the section 62 of Indian Contract Act, if both the parties to the contract mutually agree to substitute a new contract for the old one, or to rescind or alter the initial agreement, then the original contract need not to be performed. 3. Since the cause and scope of the two agreements in 1993 and 1994 were considerably different as the agreement in 1993 was to provide license to Gujarat Bottling company under the common law and the agreement in 1994 was to meet the requirements of the statute for registration of GBC under Trade and Merchandise Act, 1958, hence the agreement in 1994 cannot be considered as a substitute to the agreement in 1993. 4. The substitution of an agreement must be with the consent of all the parties involved in the contract and with a clear intention to change the original agreement. In this case there was no express intention of the parties involved to substitute the 1993

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