Errington v Errington [1952] 1 KB 290 is a significant case in the context of contract law, particularly concerning the formation and enforcement of unilateral contracts and the status of contractual licences. The case revolves around a promise made by a father to his son and daughter-in-law regarding the ownership of a house, contingent upon the repayment of a mortgage.
The legal issues at the heart of the case include the existence of a unilateral contract, the binding nature of such contracts when the promise is partially performed, and the question of whether the couple, who were not party to the contract, had enforceable rights after the father’s death.
The decision in Errington v Errington clarified several important principles regarding unilateral contracts, contractual licences, and the rights of third parties in contract law.
Facts of Errington v Errington
In Errington v Errington, the facts centred on a house purchased by Mr Errington, who was the father of the claimant and the husband of the widow (the defendant). Mr Errington bought a house in Newcastle upon Tyne in 1936, securing a mortgage from a building society.
The house was purchased for his son and daughter-in-law to live in, with the father agreeing that they could have the house as their own once the mortgage was paid off. The father contributed £250 of his own funds to the purchase but left the couple responsible for the ongoing mortgage repayments, which amounted to 15s. per week. He further assured them that the house would belong to them once the mortgage was fully paid.
The son and daughter-in-law duly made the mortgage payments, but the father passed away before the mortgage was fully paid off. After the father’s death, the couple continued to make the payments, but the father’s widow (the claimant in this case) sought possession of the house, as she had inherited it under her late husband’s will.
The daughter-in-law, who had divorced the son, remained in possession of the house, leading to the legal dispute. The question before the Court of Appeal was whether there existed a valid contract for the transfer of the house to the couple.
Issues
The central issue in Errington v Errington was whether there existed a legally binding contract for the sale of the house, and if so, whether it could be enforced after the death of the father. The case raised several key legal issues:
- Was there a unilateral contract between the father and the couple?
- Was the promise of the father to transfer the house binding once the couple began paying the mortgage?
- Did the couple have any enforceable rights to remain in the house, given that the father’s widow sought possession of the property after his death?
- Could the promise made by the father be considered a contractual licence, and if so, what were the implications for third parties?
Errington v Errington Judgement
The Court of Appeal unanimously held that there was a unilateral contract between the father and the couple. Lord Justice Somervell, Lord Justice Denning, and Lord Justice Rodson all agreed that the father’s promise to transfer the house to the couple in return for their payment of the mortgage instalments constituted a valid unilateral contract. The court also determined that the couple’s performance—namely, paying the mortgage—created binding obligations on the father and his estate, which could not be revoked once the couple had begun performance.
The court further held that the couple were not bound by any reciprocal promise to pay the mortgage instalments, but their performance created an enforceable contract. Importantly, the court found that the contract could not be revoked by the father once the couple had begun paying the mortgage instalments, nor could it be revoked by his widow after his death, as long as the couple continued to fulfil their obligations.
Lord Justice Somervell’s Judgement
Lord Justice Somervell was the first to address the issue of whether the couple had made a reciprocal promise to pay the mortgage. He noted that although the father had undertaken to convey the house to his son and daughter-in-law once the mortgage was paid, there was no explicit reciprocal promise from the couple to make the payments.
Despite this, Somervell concluded that the couple’s actions—making the mortgage payments—were sufficient to create a binding contract. He emphasised that the contract was conditional upon the mortgage being paid and that, once the payments were made, the father’s promise to transfer the house would be enforced.
Somervell also considered whether the couple could be classified as tenants or licensees. He concluded that they were licensees and not tenants at will, meaning that their right to remain in the property was linked to the continued payment of the mortgage. This was crucial because it meant that the father or his widow could not eject them while they were fulfilling the terms of the contract.
Lord Justice Denning’s Judgement
Lord Justice Denning offered a more expansive view on the nature of the promise made by the father. He agreed that the promise constituted a unilateral contract, but he also considered whether the couple were legally obligated to pay the mortgage instalments. Denning rejected the idea that the couple were bound to pay the instalments, noting that it was not necessary for the court to imply such an obligation. He argued that the father’s promise was clear enough: the house would belong to the couple once the mortgage was fully paid off, and they had performed the act required—making the payments.
Denning further affirmed that once the couple began paying the mortgage, the contract was binding and could not be revoked, even after the father’s death. Denning highlighted that the couple’s rights were analogous to those of a purchaser, even though they had not formally agreed to pay the mortgage as part of a bilateral contract. In his judgement, Denning emphasized that the father’s promise was enforceable, and the couple could not be evicted from the property unless they ceased making payments.
Denning’s judgement also clarified the issue of whether the couple were tenants or licensees. He concluded that the couple were licensees because they were not obligated to pay the mortgage but were allowed to stay in the house as long as they did so. His analysis built on the concept of contractual licences, which he argued could not be revoked by the licensor or subsequent owners, unless they were bona fide purchasers without notice.
Lord Justice Rodson’s Judgement
Lord Justice Rodson agreed with the conclusions reached by Lord Justice Denning and Lord Justice Somervell. He concurred that the couple were licensees with a right to remain in the house as long as they continued to pay the mortgage. Rodson also affirmed the binding nature of the unilateral contract and the enforceability of the promise made by the father.
Conclusion
Errington v Errington [1952] 1 KB 290 remains a landmark case in contract law, particularly in relation to unilateral contracts and the enforceability of promises. The Court of Appeal’s decision reinforced the principle that unilateral contracts, once performance has begun, cannot be revoked and must be honoured.
The case also advanced the concept of contractual licences, showing that such licences could bind third parties under certain circumstances. While some aspects of Lord Denning’s judgement were later overruled, Errington v Errington continues to be a foundational case in English contract law.
