Financings Ltd v Stimson [1962] 3 All ER 386

Material Facts:

The defendant, Stimson, offered to buy a car from the plaintiff, Financings Ltd, on a hire purchase basis. Stimpson deposited an initial amount of £70 as part of the cost of the car which stood at £414. As part of the offer sent by Stimson to Financings Ltd, it was stated that Stimpson would only be bound after Financings Ltd signed the agreement. On March 20th, Stimpson was dissatisfied with the car and returned it to the garage of Financings Ltd, stating that he was withdrawing from the contract. Financings Ltd unaware the car had been returned by Stimpson, signed the hire purchase forms on 25th March. Financings Ltd’s garage was broken into on the 24th and the car was stolen, they sought to recover the remaining balance from Stimpson.

Issue:

1. Whether or not the parties had formed a complete contract.

Holding:

That there was no complete contract between the parties.

Ratio Decidendi:

The court ruled that the return of the car constituted a revocation of the defendant’s offer prior to acceptance. It was noted that the defendant had prescribed how acceptance ought to be done, which was by signing. Since the defendant revoked his offer by returning the car and prior to acceptance of the plaintiff, the offer was deemed to have been effectively revoked. Whilst the plaintiff’s conduct of giving the car to the defendant could be held as acceptance by conduct, the court ruled the mode of acceptance was prescribed and ought to be followed for acceptance to be valid.

Comments:

What are your comments for this case and the ruling?