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Facts[]

In 1930, a father bought a house for his son and daughter-in-law (Wood) to live in, telling her that the down-payment was a gift, but they were expected to pay the mortgage and that "the house will be your property when the mortgage is paid". He also said that when he retired he would put the house in their names. Wood paid mortgage installments regularly, but when they found both the rates (property taxes) and the mortgage too burdensome, the father agreed to pay the rates as well. The father died leaving his estate to his wife (Errington). After the father's death, Wood split from Errington's son. Errington sued for possession of the house.

Issue[]

  1. At what stage of performance of a unilateral contract by the offeree can the offeror revoke the offer? (Or: how do we resolve the "walking to York" or "flagpole" problem in unilateral contracts?)

Decision[]

Appeal dismissed - the couple could remain in the house so long as they continued paying the mortgage.

Reasons[]

Denning, for a unanimous court, held there was no express promise by the son and daughter-in-law to pay the instalments, and the court can imply those terms. He characterizes the father's promise as a unilateral contract; the performative act paying for the mortgage, and thus it would only be revocable if the couple did not make the payments. Once performance has started the offeror cannot revoke the offer. The father's implied intention was to keep house in their possession if they paid the mortgage. The couple were on a licence, short of a tenancy but a contractual, or at least equitable right to remain, which would grow into good equitable title as soon as the mortgage was paid.

“It could not be revoked by him once the couple entered on performance of the act, but it would cease to bind him if they left it incomplete and unperformed, which they have not done. If that was the position during the father’s lifetime, so it must be after his death.”

Ratio[]

  • An offeror may be unable to revoke an offer of a unilateral contract if performance by the offeree is substantially underway.
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