Sudbrook Trading Estate Ltd v Eggleton: HL 1982

The grantors of an option, which contained a machinery for fixing the price, had refused to appoint a valuer and that made it impossible for the contractual machinery for the valuation of the option price to work. The House of Lords held that the machinery for fixing the price was merely a subsidiary part of the agreement, and that the fact that the grantors refused to operate the machinery did not render the agreement unenforceable on the grounds that no price was fixed. The court could substitute a valuation made by the court following an inquiry. Authorities going back over many years could be overruled by the House. (Lord Fraser) ‘Accordingly when the option was exercised there was constituted a complete contract for sale, and the clause should be construed as meaning that the price was to be a fair price. On the other hand where an agreement is made to sell at a price to be fixed by a valuer who is named, or who, by reason of holding some office such as an auditor of a company whose shares are to be valued, will have special knowledge relevant to the question of value, the prescribed mode may well be regarded as essential. Where, as here, the machinery consists of valuers and an umpire, none of whom is named or identified, it is in my opinion unrealistic to regard it as an essential term. If it breaks down there is no reason why the Court should not substitute other machinery to carry out the main purpose of ascertaining the price in order that the agreement may be carried out.’


Lord Diplock, Lord Fraser


[1983] 1 AC 444, [1982] 3 All ER 1, [1982] 3 WLR 315, 1982] ANZ Conv R 541


England and Wales

Cited by:

DistinguishedMerer v Fisher and Another CA 13-May-2003
A right of pre-emption had misdescribed the property when it was registered. The land was transferred without regard to the right of pre-emption. It was found as a fact that no money passed for the transfer, and the claimants said the unregistered . .
CitedMannai Investment Co Ltd v Eagle Star Assurance HL 21-May-1997
Minor Irregularity in Break Notice Not Fatal
Leases contained clauses allowing the tenant to break the lease by serving not less than six months notice to expire on the third anniversary of the commencement date of the term of the lease. The tenant gave notice to determine the leases on 12th . .
CitedPortsmouth City Football Club v Sellar Properties (Portsmouth) Limited, Singer and Friedlander Properties Plc ChD 17-Sep-2003
Various contracts were entered into for the sale of land, with compensation being paid in certain circumstances. One contract required a calculation of consideration as a set figure less a sum to be calculated as the cost of acquiring land. The sum . .
AppliedDidymi Corporation v Atlantic Lines and Navigation Co Inc ‘The Didymi’ CA 1988
A contract contained a clause covering the rate of hire of a 5 year time charter: ’30(1) The … speed and fuel consumption of the vessel as stipulated in this charter-party are representations by the owners. Should the actual performance of the . .
AppliedRoyal Bank of Scotland v Jennings, Pezaro and Circuitpoint (Brewery Road) Limited CA 24-Oct-1996
The reddendum in the lease provided for a rent review: ‘there will be a rent review for each of the review periods’. The express machinery for such review could only be initiated by the landlord, but in refusing to initiate a review the landlord was . .
CitedIrwin v Wilson and Others ChD 23-Feb-2011
The claimant sought a declaration that his contract for the sale of leasehold property to the defendants had been lawfully terminated by a letter from his solicitors. The defendants had moved in before completion, but the claimant found himself . .
CitedB J Aviation Ltd v Pool Aviation Ltd CA 18-Jan-2002
The parties disputed the effect of a clause in an option agreement, and as to whether it contained an agreement to negotiate and was therefore not binding.
Held: Chadwick LJ said: ‘First, each case must be decided on its own facts and on the . .
MentionedMRI Trading Ag v Erdenet Mining Corporation Llc CA 8-Mar-2013
The Commercial Court had found the result of an arbitration award ‘obviously wrong’, and ineed bizarre.
Held: The appeal failed. The award was flawed, in failing to take account of the trading context between the parties: ‘The overall . .
Lists of cited by and citing cases may be incomplete.

Land, Contract

Updated: 16 May 2022; Ref: scu.183373