Daulia v Four Millbank Nominees [1977]
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Daulia Ltd v Four Millbank Nominees Ltd [1977] EWCA Civ 5 is an English contract law case that revolves around unilateral contracts. The case addresses the issue of when an offer can be withdrawn once performance has commenced.
Daulia Ltd sought to buy premises in Millbank, London, from Four Millbank Nominees Ltd, mortgagees in possession. Although formal contracts were never exchanged, Daulia claimed they had a unilateral contract where Four Millbank agreed to enter into a written contract if Daulia attended their offices with a draft contract and a deposit. When Daulia's representatives arrived, Four Millbank refused to exchange, leading to Daulia claiming a breach of the oral agreement.
The Court of Appeal dismissed Daulia's appeal. Goff LJ acknowledged the somewhat anomalous nature of a unilateral contract, where there is no contract until the offeree starts to perform the condition. He emphasised that doubts exist about whether the offeror becomes bound as soon as performance begins or only upon full completion.
Goff LJ held that Daulia fully performed or satisfied the condition when they presented themselves with a banker's draft and the written contract at the agreed time and place. Actual exchange, which did not happen, would have been additional to the satisfaction of the condition.
While acknowledging the general principle that the offeror is entitled to require full performance of the condition, Goff LJ introduced an important qualification. Once the offeree starts to perform, there is an implied obligation on the offeror not to prevent the condition from being satisfied. Revocation by the offeror becomes impossible once the offeree has embarked on performance.
Goff LJ discussed the concept of part performance and expressed doubt about the assertion that there can never be part performance of a unilateral contract. He stated that, in many cases, the offeree's acts may amount to part performance, though in this case, they did not suggest the existence of a contract.
Goff LJ considered whether the unilateral contract fell within the category of a contract for the sale or other disposition of land or any interest in land. He concluded that the unilateral contract, although not a contract for the sale of land, was a contract for some other disposition of an interest in land because it would create an equitable interest in the land if fulfilled.
Goff LJ rejected the argument that the acts of part performance were sufficient to suggest the existence of a contract. He emphasised that the acts indicated that the parties were about to make or contemplate making a contract, not that there was a contract in existence.
In summary, the Court held that Daulia's claim failed because there was no binding contract, the acts of part performance did not prove the existence of a contract, and the unilateral contract was unenforceable. The appeal was dismissed.
Daulia Ltd sought to buy premises in Millbank, London, from Four Millbank Nominees Ltd, mortgagees in possession. Although formal contracts were never exchanged, Daulia claimed they had a unilateral contract where Four Millbank agreed to enter into a written contract if Daulia attended their offices with a draft contract and a deposit. When Daulia's representatives arrived, Four Millbank refused to exchange, leading to Daulia claiming a breach of the oral agreement.
The Court of Appeal dismissed Daulia's appeal. Goff LJ acknowledged the somewhat anomalous nature of a unilateral contract, where there is no contract until the offeree starts to perform the condition. He emphasised that doubts exist about whether the offeror becomes bound as soon as performance begins or only upon full completion.
Goff LJ held that Daulia fully performed or satisfied the condition when they presented themselves with a banker's draft and the written contract at the agreed time and place. Actual exchange, which did not happen, would have been additional to the satisfaction of the condition.
While acknowledging the general principle that the offeror is entitled to require full performance of the condition, Goff LJ introduced an important qualification. Once the offeree starts to perform, there is an implied obligation on the offeror not to prevent the condition from being satisfied. Revocation by the offeror becomes impossible once the offeree has embarked on performance.
Goff LJ discussed the concept of part performance and expressed doubt about the assertion that there can never be part performance of a unilateral contract. He stated that, in many cases, the offeree's acts may amount to part performance, though in this case, they did not suggest the existence of a contract.
Goff LJ considered whether the unilateral contract fell within the category of a contract for the sale or other disposition of land or any interest in land. He concluded that the unilateral contract, although not a contract for the sale of land, was a contract for some other disposition of an interest in land because it would create an equitable interest in the land if fulfilled.
Goff LJ rejected the argument that the acts of part performance were sufficient to suggest the existence of a contract. He emphasised that the acts indicated that the parties were about to make or contemplate making a contract, not that there was a contract in existence.
In summary, the Court held that Daulia's claim failed because there was no binding contract, the acts of part performance did not prove the existence of a contract, and the unilateral contract was unenforceable. The appeal was dismissed.
