Introduction
The Court of Appeal decision in Errington v Errington and Woods [1952] 1 KB 290 is a significant case in English law, touching upon both contract and land law. It is most famous for establishing a key principle regarding the revocation of unilateral offers, but it also made an important, though more controversial, contribution to the law on contractual licences. This commentary will explain the facts and decision in Errington before analysing its impact on these two areas of law. It will be argued that while the case provided a welcome, equitable solution to prevent offerors from withdrawing promises once performance has begun, its attempt to elevate a contractual licence to an interest capable of binding third parties has not been sustained in later case law.
The Facts and Decision
In 1936, a father bought a house in his own name for his son and daughter-in-law to live in. He paid a deposit of £250 and borrowed the remaining £500 from a building society, secured by a mortgage on the property. He told the daughter-in-law that if she and his son paid the weekly mortgage instalments, the house would be theirs once the mortgage was fully paid off. The couple moved in and began making the payments. The father died nine years later, leaving all his property, including the legal title to the house, to his widow in his will. After the son left his wife, the widow brought an action to claim possession of the house from the daughter-in-law, who was still living there and continuing to pay the instalments.
The Court of Appeal unanimously held that the widow was not entitled to possession. Lord Denning, giving the leading judgment, reasoned that the father’s promise was a unilateral contract. As long as the couple continued to pay the mortgage instalments, they had a right to remain in the property, and the father’s promise could not be revoked. This right was held to be a contractual licence which was binding on the widow, who had inherited the property as a volunteer rather than purchasing it.
The Principle of Irrevocable Unilateral Offers
The most enduring legacy of Errington lies in its modification of the rules on acceptance in unilateral contracts. A unilateral contract is formed when one party makes a promise in return for the performance of an act by another party. The traditional position was that acceptance is only completed when the act is fully performed, and the offeror is free to revoke the offer at any time before then. This could lead to unfair outcomes, as an offeree could expend significant time and effort only for the offer to be withdrawn just before completion.
Errington provided a more equitable solution. Lord Denning stated that the father’s promise was a unilateral contract that could not be revoked once the couple had started performing the act of acceptance, which was paying the mortgage instalments. He explained:
> "The father's promise was a unilateral contract—a promise of the house in return for their act of paying the instalments. It could not be revoked by him once the couple entered on performance of the act, but it would cease to bind him if they left it incomplete and unperformed." (Errington v Errington and Woods [1952] 1 KB 290, 295)
This created an implied obligation on the part of the offeror not to revoke the offer once performance has commenced. This principle protects the reliance of the offeree and ensures that they have the opportunity to complete the act of acceptance. This aspect of the decision is widely accepted and represents a key principle in the modern law of contract (McKendrick, 2023).
Contractual Licences and Third Parties
The second important aspect of the decision relates to the nature of the couple’s right to occupy the property. Denning LJ classified their right as a contractual licence. Historically, licences were viewed as purely personal rights that could not bind third parties who acquired the land (King v David Allen & Sons, Billposting, Ltd [1916] 2 AC 54). However, Denning LJ argued that this licence gave the daughter-in-law an equitable right to remain in the property as long as she paid the instalments, which was enforceable against the father’s successor in title (his widow). Because the widow had not provided consideration for the house, she was a ‘volunteer’ and was therefore bound by the daughter-in-law's equitable interest.
This part of the judgment was more radical, as it suggested that a contractual licence could become a proprietary interest capable of binding third parties, blurring the clear distinction between personal and proprietary rights in land (Gray and Gray, 2011). However, this reasoning has been challenged by subsequent authorities. In Ashburn Anstalt v Arnold [1989] Ch 1, the Court of Appeal expressly rejected the idea that a contractual licence automatically creates a proprietary interest in land. The court held that a contractual licence is not an interest in land and therefore cannot bind a successor in title on its own, though a constructive trust may arise in certain circumstances to produce a similar result.
Conclusion
In summary, Errington v Errington and Woods is a landmark decision with a dual legacy. Its contribution to contract law, by establishing that a unilateral offer cannot be revoked once performance has begun, remains a cornerstone of the subject, providing fairness and protecting the offeree’s reliance. In contrast, its attempt to elevate a contractual licence to a proprietary right capable of binding third parties has not endured. Later cases have reasserted the traditional distinction between personal and proprietary rights, limiting the land law impact of Errington. The case, therefore, stands as an important example of judicial creativity aimed at achieving justice, with its contractual principle being a lasting success while its land law reasoning proved to be a step too far for English property law.
References
Ashburn Anstalt v Arnold [1989] Ch 1
Errington v Errington and Woods [1952] 1 KB 290
Gray, K. and Gray, S.F. (2011) Elements of Land Law. 5th edn. Oxford: Oxford University Press.
King v David Allen & Sons, Billposting, Ltd [1916] 2 AC 54
McKendrick, E. (2023) Contract Law. 15th edn. London: Palgrave Macmillan.
