From Law wiki, the wiki for law research

Template:UK contract law

This case Errington v Errington [1952] 1 KB 290 demonstrates how a unilateral Offer cannot be revoked while the Consideration is excutory.

A father wanted to help his son and daughter-in-law to buy a house. The father bought a house, providing one third of the price himself, and took out a mortgage for the other two thirds. He promised that if the couple maintained the mortgage payments, he would convey the whole property to them when the mortgage was paid.

Time passed; the father died and the couple separated. The daughter-in-law continued to live in the house and both partners maintained the payments. The wife of the deceased, unprepared to allow the property to benefit her son's estranged wife, sued for return of the house.

It was ruled by the court that the father had made a unilateral offer, and the couple had accepted it by beginning the payments. Since the payment of the mortgage formed the consideration in the agreement, the consideration would remain executory until the mortgage was repaid. Therefore offer could not be revoked so long as the payments continued.

It was also held that the although the occupier of the house was in occupation under a mere licence, not a lease, the licence granted by the father could be enforced by the occupier against his widow. This is strange, because the orthodox view is that licences are not property rights, and cannot be enforced against third parties.Lord denningwas prepared to accept that the licence could be enforced, despite a long history of authorities to the contrary, although the reasoning is not obvious, and later cases have cast doubt on this view.

Errington v Errington and Woods [1952] 1 KB 290

Contents 1 Facts of the Case 2 Findings of County Court Judge 3 Decision by Court of Appeal 4 Rationale

Facts of the Case

In order to help his son and daughter-in-law buy a residential house, the father himself purchased a house through a building society by paying 33% of the price and the remaining 67% was to be settled through mortgage via weekly instalments. After paying few instalments, he promised his son and daughter-in-law the ownership in that residential house, if the couple agreed to pay the remaining instalments. The arrangement worked fine till one day, the father died bequeathing his entire estate to his wife (widow). After some time, the couple separated and the son started living with his widowed mother, but the wife (daughter-in-law) still occupied the house and continued paying remaining instalments. In the meantime, the widow brought a suit for return of the house as per the will of her late husband.

Findings of County Court Judge

Dismissing the contentions made by the widow, the County Court Judge Richardson (at Newcastle-upon-Tyne) observed that under the law, the son and daughter-in-law were tenants-at-will. Moreover, the claim was barred by the Limitation Act, 1939. The widow went in appeal against the findings of County Court Judge.

Decision by Court of Appeal

Upholding the decision of theCounty CourtJudge, the Court of appeal made the following observations:

1. The son and the daughter-in-law were licensees of the residential house but without any power to assign or sublet. 2. However, the son and daughter-in-law were fully entitled under the personal contract to occupy and enjoy the possession of the residential house as long as they continue to pay instalments to the building society

However, the more point was whether the son and daughter-in-law were entitled to conveyance of the property after the last instalment has been paid?

Somervell L.J. was of the view that since the contract was oral, the right to a conveyance of the property after the last instalment has been paid should be the subject matter covered under Sections 53 and 55 of the Law of Property Act, 1925. The issue was not under consideration of the court. But the arguments put forward by Somervell L.J. seem to indicate the application of doctrine of part performance in this case. In this regard, [[Judge::Lord denning]] in Lynes v. Snaith [1899] 1 Q.B. 486 observed: “The couple were licensees having a permissive occupation short of a tenancy, but with a contractual right, or at any rate an equitable right, to remain so long as they paid the instalments, which would grow into a good equitable title to the house itself as soon as the mortgage was paid”.

However, Hodson L.J. opined that whenever the last instalment was paid, the question to be decided would be whether the mother was bound to convey the property to her son and daughter-in-law.

Rationale

There is an implied promise not to revoke once performance has commenced in case of a unilateral contract.