Dahlia v Four Millbank

Dahlia v Four Millbank Nominees [1978] Ch 231

Contract – Unilateral Contract – Performance – Offer – Revocation – Land of Property Act 1925

Facts

This case concerns selling property. The complainant, Dahlia, wanted to purchase property from the defendants, Four Millbank Nominees. The parties had agreed terms orally, but there was no written contract between them. Four Millbank Nominees promised the complainant that if a banker’s draft was arranged for the deposit and this was completed before 10am on the 22^nd December, a written contract would be drawn up. Dahlia proceeded to fulfil this request, but the defendants refused to complete the sale of the property.

Issues

The courts initially dismissed the complainant’s claim, as it did not comply with section 40(1) of the Land of Property Act 1925. However, this decision was appealed. The complainant argued that a unilateral contract existed between the parties and that the defendants were therefore bound to complete the written contract for the property. The issue in this case was whether there was a unilateral contract and if the offer could be revoked after performance began.

Decision/Outcome

It was held that a unilateral contract did exist, but this could not be effective as it did not comply with section 40(1) of the Land of Property Act 1925; the appeal was dismissed. The court stated that until performance, an offeror can revoke the offer he has made at any time. There would be no binding contract between the two parties. However, once the offeree has begun performance, the offer comes into effect and it can no longer be revoked by the offeror to the contract.