A purchaser signed a hire purchase agreement for a motor vehicle in early March 1961. A clause in the agreement provided that when the form was signed by the purchaser it would become binding ‘upon acceptance by signature’ of an officer of the finance company. An officer of the finance company did not sign the agreement until late March 1961 and in the intervening period the purchaser returned the vehicle due to dissatisfaction with its condition and performance and the vehicle was subsequently stolen resulting in damage.
Held: The purchaser’s signature on the hire purchase agreement form was ‘in law not an agreement, but only an offer by [the purchaser] to enter into a hire purchase agreement with a . . Finance Company.’ There was implied a condition into the offer that the subject matter of the offer must remain in substantially the same condition it was in at the time of the offer, failing which the offer lapses.
Pearson LJ said: ‘The judge found in terms that this car suffered severe damage before the acceptance and that there was substantial depreciation as the result. On that basis it seems to me that we should by implication read into this offer, in order to give the transaction that business efficacy which the parties must have intended it to have, an implied condition that this offer was capable of acceptance only if the car remained in substantially the same condition with substantially the same value. That condition in this case was not fulfilled because the car was severely damaged and its value was substantially depreciated. Therefore, when the [plaintiffs] purported to accept it . . it was an offer which was no longer capable of acceptance, and therefore no agreement was concluded.’
Donovan LJ agreed, and said: ‘Who would offer to purchase a car on terms that if it were severely damaged before the offer was accepted, he, the offeror, would pay the bill? . . The county court judge held that there must, therefore, be implied a term that until acceptance the goods would remain in substantially the same state as at the date of the offer; and I think that this is both good sense and good law.’
Lord Denning MR held that it was not necessary for any particular action to be taken to manifest a revocation of an offer, so long as the intention is clear.
Judges:
Lord Denning MR, Donovan, Pearson LJJ
Citations:
[1962] EWCA Civ 1, [1962] 3 All ER 386, [1962] 1 WLR 1184
Links:
Jurisdiction:
England and Wales
Cited by:
Cited – Car and Universal Finance Company Ltd v Caldwell CA 19-Dec-1963
The defendant had sold a car, taking as payment a cheque which was dishonoured; the plaintiffs later bought the car in good faith.
Held: The defendant was entitled to return of the car, even though the original purchaser had disappeared, and . .
Lists of cited by and citing cases may be incomplete.
Contract
Updated: 12 July 2022; Ref: scu.262809
