A partnership deed provided an option for a surviving partner to purchase a deceased’s partner’s share upon giving notice within three months of the death. The partner who survived was not of sound mind, but his solicitor gave timely notice, later confirmed by an order under the Lunacy Acts. A second notice was then given, but out of time.
Held: The option had not been exercsied within the necessary time limit, and no contract had been created of which the second notice could take the benefit.
Chitty J said: ‘The doctrine of equity, that time is not of the essence of the contract, is not one of universal application, and it is settled with reference to options of this kind that there is no difference as to time between the rule of equity and the rule of common law; in other words, in exercising an option of this nature where time is limited the option must be exercised (if at all) within the time for which it is expressed to be given, both at law and in equity.’
To be valid, the exercise of an option to acquire an interest in property must be performed strictly in accordance with its prescribed terms. A failure could not be rectified by the executor out of time since ratification of an act does not apply retrospectively.
Chitty J
[1896] 2 Ch 348, [1896] 65 LJ Ch 724, 75 LT 137, 44 WR 595, 40 Sol Jo 599
England and Wales
Citing:
Distinguished – Bolton Partners v Lambert 1889
The equitabe remedy of ratification cannot be relied upon so as to render an innocent recipient a wrongdoer. Cotton LJ said ‘an act lawful at the time of its performance [cannot] be rendered unlawful, by the application of the doctrine of . .
Cited by:
Cited – Haugland Tankers As v RMK Marine Gemi Yapim Sanayii Ve Deniz Tasimaciligi Isletmesi As ComC 9-Mar-2005
An option agreement was granted for the sale of a ship hull. The option was excercised but the defendant claimed the commitment fee required was not paid.
Held: The exercise of an option had to be in the precise terms set out in the contract. . .
Cited – Di Luca v Juraise (Springs) Limited; Amess and Amess CA 6-Oct-1997
In regard to options for the purchase of land, time constraints are of the essence. An option is not a contract but an irrevocable offer that matures into a bilateral contract upon due exercise of the option during the option term . .
Lists of cited by and citing cases may be incomplete.
Contract, Equity
Updated: 27 December 2021; Ref: scu.223446