14 / 300
Justice Willes said : "The only question is whether it is
sufficient to satisfy the Statute that the party charged
should sign what he proposes as an agreement, and
that the other party should afterwards assent without
writing to the proposal? As to this, it is clear, both on
reason and authority, that the proposal so signed and
assented to, does become a memorandum or note of
agreement within the fourth section of the Statute."
Lord Justice Bowen said
In re New Eberhardt
Com-
pany
([1889] 43 ChD 118, 129): "We are bound by
Reuss v. Picksley."
During the past three years the "offer cases" had
been extended far beyond the limit thus set by Lord
Justice Bowen. They had been stretched so as to cover
Correspondence which was expressly stated to be "sub-
l e t to contract". Th at was done because the "offer
cases" were thought to support a wide principle which
was stated by Lord Justice Buckley in
Law v. Jones
(P- 1003) "It is not, in my judgment, necessary that
the note or memorandum should acknowledge the
existence of a contract. It is not the fact of agreement
out the terms agreed upon that must be found re-
corded in writing". In accordance with that principle,
the court held that a solicitor's letter setting out terms
subject to contract" was a sufficient writing to satisfy
the Statute. The court said that the words "subject to
contract" were a suspensive condition which could be
waived by subsequent oral agreement between the
Parties. They could be removed from the document by
oral evidence (
Gr i f f i t h s v. Young
([1970] 1 Ch 671,
b
»5, 686, 687; and
Law v. Jones,
p. 1004). The court
acknowledged that a letter which denied the very exis-
tence of a contract would not satisfy the Statute (per
Lord Justice Buckley), but held that the words "sub-
ject to contract" were not to be treated as a denial of
the contract, but only as imposing a suspensive con-
hjtion, the subsequent waiver of which could be esta-
blished by oral evidence (per Lord Justice Orr).
Law v. Jones alarming
Laa;
v. Jones
had sounded an alarm bell in the
offices of every solicitor in the land. And no wonder.
^.
1
was the everyday practice for a solicitor who was
ffistructed in a sale of land to start the correspondence
W l t
h a letter "subject to contract" setting out the terms
°
r
enclosing a draft. He did it in the confidence that it
Protected his client, who was not bound by what had
a
ken place in conversation. The reason was that for
oyer 100 years the courts had held that the effect of
he words "subject to contract" was that the matter re-
ffiained in negotiation until a formal contract was exe-
r t e d (
Eccles v. Bryant
[1948] 1 Ch 93). But
Law v.
Jones
had taken away all protection from the client,
meant that the client was exposed to the full blast
* frauds and perjuryes" attendant on oral testimony.
v
en without fraud or perjury, he was exposed to
°nest difference of recollections leading to law suits,
^rom which it was the very object of the Statute to save
The decision in
Griffiths v. Young
could be justified
?h other grounds, but not the decision in
Law v. Jones.
/ /
a
s it correctly decided? His Lordship did not think
yyas. Lord Justice Russell dissented from the majority,
n
d his reasoning was convincing. His Lordship could
o t
see any difference between a writing which (i)
e
nied there was any contract; (ii) did not admit there
as any contract; (iii) said that the parties were in
„
e
Sptiation; or (iv) said that there was an agreement
subject to contract", for all that came to the same
thing. The reason why none of those writings satisfied
the Statute was because none of them contained any
recognition or admission of the existence of a contract.
In
Gallie v. Lee
([1969] 2 Ch 17, 37) his Lordship
said, "We are, of course, bound by the decisions of the
House, but I do not think we are bound by prior
decisions of our own; or, at any rate, not absolutely
b o u n d . . . .
It is very, very rarely that we will go against a
previous decision of our own, but, if it is clearly shown
to be erroneous, we should be able to put it right."
However, his Lordship had not yet persuaded all his
brethren to agree with this view.
Circumstances in which Court of Appeal not bound
by another Court of Appeal
In
Young v. Bristol Aeroplane Co.
([1944] KB 718)
Lord Greene, Master of the Rolls, set down the cir-
cumstance in which the Court of Appeal would not be
bound by a previous decision of its own. The relevant
one here was that "The court is entitled and bound
to decide which of two conflicting decisions of its own
it will follow". Applying that in the present case his
Lordship thought that the principle contained in the
recent "subject to contract" cases was an illegitimate
extension of the "offer in writing" cases. It was in con-
flict with the principle laid down by the Exchequer
Chamber in
Buxton v. Rust
([1872] LR 7 Ex 1) and
the Court of Appeal in
Thirkell v. Cambi
that "in order
to be a sufficient memorandum, there must be a signed
admission that there was a contract and a signed ad-
mission of what that contract was".
In his Lordship's opinion, therefore, their Lordships
were not bound to follow
Law v. Jones.
The legal pro-
fession should be freed from the anxieties which beset
them and that should be done without delay. His Lord-
ship would hold that
Law v. Jones
was wrongly decided
and should be overruled. The writing here, being ex-
pressly "subject to contract", was not sufficient to
satisfy the Statute. There was no enforceable contract
between the parties. There was not sufficient reason for
entering a caution on the register and it should be
vacated at once.
Lord Justice Stamp, concurring, said that he could
not reconcile the reasoning in
Reuss v. Picksley
with
Lord Justice Buckley's reasoning in
Law v. Jones
that
because the writing containing the offer could not
record or acknowledge an existing coptract the line of
cases, of which
Reuss v. Picksley
w^is one, supported
the proposition that the note or memorandum did not
need to do so.
Faced with a conflict between
Law v. Jones
and
earlier cases of equal authority, the court should, as it
was entitled to do in accordance with
Young v. Bristol
Aeroplane Co.
prefer the earlier authorities.
Lord Justice Scarman, also concurring, said that he
agreed in believing that
Griffiths v. Young
and
Law v.
Jones
were in conflict with previous decisions of equal
authority. For the reasons given in the preceding judge-
ments his Lordship was convinced that
Law v. Jones
was wrongly decided and that the reasoning in
Griffiths
v. Young
was erroneous in so far as it proceeded on the
principle that the note or memorandum required by
the section did not need to recognize the fact of agree-
ment, provided it contained the terms.
Leave to appeal to the House of Lords was con-
ditionally given, but was not pursued.
13