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DECISION OF PROFESSIONAL INTEREST
LAW v. JONES NOT FOLLOWED:
SOL I C I TORS' CL I ENTS ST I LL P ROT ECT ED
Tiverton Estate; Ltd. v. Wearwell Ltd. (1974) 1 All
E.R. 209.
Before Lord Denning, Master of the Rolls, Lord
Justice Stamp and Lord Justice Scarman.
A solicitor's letter setting out the terms of an oral
agreement made in respect of the sale of land "subject
to contract" was not sufficient to satisfy the require-
ments of section 40 of the Law of Property Act, 1925.
Section 40 provides: "No action may be brought
upon any contract for the sale or other disposition of
land or any interest in land, unless the agreement upon
which such action is brought, or some note or memo-
randum thereof, is in writing, and signed by the party
to be charged, or by some other person thereunto by
him lawfully authorised."
The Court of Appeal dismissed an appeal by Wear-
well Ltd., of Commercial Road, East London, from an
interlocutory order by which Mr. Justice Goulding on
October 3 directed that a caution registered by them in
respect of Empire House, Stepney, should be cancelled
and the entry on the register vacated.
The Master of the Rolls said that on April 10 a
differently constituted Court of Appeal decided
Law v.
Jones;
[1973] 2 WLR 994). It caused consternation
among solicitors. They had always understood that, on
a sale of land, they could protect their clients by writing
their letters "subject to contract".
Law v. Jones
shat-
tered that belief. To the minds of solicitors, it virtually
repealed the Statute of Frauds. It exposed their clients
to liability even though there was nothing in writing
which acknowledged the existence of a contract. Their
Lordships were called on to reconsider that decision.
Facts of Case
Tiverton Estates Ltd. owned a leasehold property,
Empire House, registered as a lease for 80 years from
1934, with Tiverton as proprietors. On July 4 there was
a meeting between Mr. Israel, a director of Tiverton,
and Mr. Nadir, a director of a public company, Wear-
well. Mr. Nadir, in an affidavit, said that at that
meeting they orally agreed on the sale of the property
by Tiverton to Wearwell for £190,000 and made
arrangements about the time when possession should
be given of various parts. They shook hands on the
deal and agreed to instruct their solicitors to confirm
the sale.
On that very day the solicitor for the purchasers
wrote to the solicitor for the vendors : "Empire House :
We understand that you act for the vendor in respect
of the proposed sale of the above-mentioned property
to our client, Wearwell Ltd., at £190,000 leasehold
subject to contract. We look forward to receiving the
draft contract for approval, together with copy of the
lease at an early date." The next day Mr. Israel tele-
phoned to Mr. Nadir about completion and also wrote
confirming that "you agreed that the completion of the
purchase of the property can take place as soon as
possible". On July 9 the vendors' solicitor wrote to the
purchasers' solicitor sending a "draft contract for
approval".
The vendors, however, decided not to go on with
the sale, and on July 19 their solicitor wrote to the
purchasers' solicitor saying "We understand that the
matter is not now proceeding, and shall be grateful if
you would kindly return the papers." The purchasers
solicitor replied on July 20 that "We are most surprised
to learn that your instructions are that the matter is not
proceeding. There is ample evidence that a contract
was concluded between our clients. . . ."
On August 28 he registered a caution at the Land
Registy in favour of Wearwell. The vendors' solicitor
applied by motion for an order that the entry of the
caution be vacated. On October 3 Mr. Justice Goulding
ordered that the caution be cancelled; the purchasers
appealed. The appeal was expedited especially because
of the importance of the case to the parties and to the
profession.
His Lordship rejected the procedural point taken by ,
Mr. Francis for the purchasers, that the court could not,
or at any rate should not, use a motion so as summarily
to vacate an entry before trial. The entry of a caution
cast a dark shadow on the property. It paralysed deal-
ings in it. No one would buy the property under such
a cloud. The courts were masters of their own pro-
cedure and could do what was right, and if it was
drawn to the court's attention that a caution had been
entered when it ought not to be then the court could
order it to be vacated forthwith.
^
Did writing satisfy Statute of Frauds?
The point of substance was whether there was any
writing sufficient to satisfy the Statute of Frauds, now
section 40 of the Law of Property Act, 1925. There were
two lines of authority to be considered. According to
the one line, in order to satisfy the Statute, the writing
must contain, not only the terms of the contract, but
also an express or implied recognition that a contract
was actually entered into. According to the other, it
was not necessary that the writing should acknowledge
the existence of a contract. It was sufficient if the con-
tract was by word of mouth and that the terms could
be found set out in writing without any recognition
whatsoever that any contract was ever made.
The first line of authority was derived from a pro-
blem which arose under section 17 of the Statute of
Frauds which required a writing in the case of the sale
of goods over £10. It was plain from the decision >
of the Court of Appeal in
Thirkell v. Cambi
([1919]
2 KB 590) that it was essential that the writing should
contain an admission of the existence of the contract
and of all its terms, and it was not sufficient to satisfy
the Statute if it failed to do so. The cases on sale of
goods were of good authority in relation to the sale
of land.
Written offer accepted orally
The other line was derived from a problem which
arose when one party made an offer in writing which
was accepted by the other party by word of mouth or
by conduct. It had always been held that the party
who signed the offer was bound by it; the contract .
could be enforced against him, but he could not en-
force it against the other. His Lordship could well
understand the reason why the courts established that
doctrine about a written offer. As the common la\V
knew nothing of the doctrine of part performance the
decisions about the acceptance of a written offer were
very necessary to meet the justice of the case.
In
Reus v. Picksley
([1866] LR 1 Ex 343) Mr.
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