Cases - Christie Owen & Davies Ltd v Stockton

Record details

Name

Christie Owen & Davies Ltd v Stockton

Date

(1953)

Citation

2 AII ER 1149

Legislation

• Law of Property Act 1925
• Law of Property (Miscellaneous Provisions) Act 1989

Keywords

Estate agency - commission - Law of Property Act 1925 - Law of Propert (Miscellaneous Provisions) Act 1989, section 2

Summary

This case concerns the sale of a restaurant lease and goodwill. It raises an interesting point about the interpretation of the commission clause now that section 40 of the Law of Property Act 1925 has been repealed. Under this section an oral contract for the sale of land was unenforceable. Under the current law, set out in section 2 of the Law of Property (Miscellaneous Provisions) Act 1989, oral land contracts are not merely unenforceable, they are void.

In the Stockton case, commission was due 'should the owner withdraw after having accepted an offer to purchase by a person able and willing to enter into a formal contract'.

It was held that an offer, subject to contract, would not suffice. However, an unqualified offer which was accepted orally would entitle the agent to commission. In such a case there would be a contract which the vendor could withdraw from lawfully, as oral contracts were unenforceable.

Today, this arrangement creates no contract at all. Whether the client's oral 'acceptance' of the firm offer would entitle the agent to commission is doubtful. As there is no contract at all, arguably there is nothing for the owner to 'withdraw' from - so no commission is due. Furthermore, the courts normally regard the word 'offer' as meaning something the acceptance of which forms a contract.