A buyer of a Rolls-Royce motor chassis agreed for a body to be built upon it by a fixed date. The body was not completed by that date, but after pressing for delivery, he gave a notice that unless delivery of the car with a completed body was effected within four weeks he would cancel the contract. The car was not delivered within the period of four weeks. However, thereafter the plaintiffs sought to deliver the car and, when delivery was not accepted, they sued for the sum due to them under the contract.
Held: The defendant was entitled to cancel the contract. The plaintiff argued ‘that no notice making time of the essence could be given in regard to contracts for work and labour. The judge thought that it was a contract for the sale of goods. It was unnecessary to determine whether it was a contract for the sale of goods or a contract for work and labour, because the defendant was entitled to give a notice bringing the matter to a head. It would be most unreasonable if the defendant, having been lenient and waived the initial expressed time, should, by so doing, have prevented himself from ever thereafter insisting on reasonably quick delivery. He was entitled to give a reasonable notice making time of the essence of the matter. Adequate protection to the suppliers is given by the requirement that the notice should be reasonable.’
Lord Denning: ‘If the defendant, as he did, led the plaintiff to believe that he would not insist on the stipulation as to time and that if they carried out the work, he would accept it, and they did it, he could not afterwards set up the stipulation as to time against them. Whether it be called waiver or forbearance on his part or an agreed variation or substituted performance does not matter. It is a kind of estoppel. By his conduct he evinced an intention to affect their legal relations. He made in effect a promise not to insist upon his strict legal rights. That promise was intended to be acted upon and was in fact acted upon. He cannot afterwards go back on it.
The reasonableness of the notice must be judged at the time at which it is given.
‘However, the giving of such notice does not entitle the buyer retrospectively to rely upon the seller’s breach of contract in the period of the waiver or estoppel, since that is the breach which is waived or he is estopped from relying upon. To hold otherwise would retrospectively cancel the effect of equity’s protection, which is unconscionable. The requirement that the buyer give notice fixing a reasonable time for delivery, thereby once again making time of the essence of the contract, has the practical effect that the time on which he is entitled to rely starts to run from the date on which notice is given, not from the date of the original and waived breach.’
Denning LJ
[1950] 1 KB 616, [1950] 1 All ER 420
England and Wales
Cited by:
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Lists of cited by and citing cases may be incomplete.
Updated: 22 August 2021; Ref: scu.199552 br>