Errington v. Errington Woods [1952] 1 KB 290

Material Facts:

Sometime in 1936, a father bought a house for his son and daughter-in-law to live in. He had put down £250 in cash and borrowed £500 from a building society on the security of the house, repayable with interest by instalments of 15s. 0d. a week. Although the house was in his own name, he promised to transfer the title to the house to the couple if they paid off the loan. In his words, "the house will be your property when this mortgage is paid." The daughter-in-law was repaying the loan, but her father-in-law died before she could fully repay the loan. Upon the father’s death, he left the house to his widow, who then instituted the present action to eject the daughter-in-law from the house and recover possession (her son had left the house to live with her).

Issue

Whether or not the daughter-in-law (defendant) was entitled to have the house recognised as her property

Holding:

The daughter-in-law (defendant) was entitled to have the house recognised as hers because a unilateral offer had been made by the deceased father, and she was performing the acceptance.

Ratio Decidendi:

Per Lord Denning,

The father's promise was a unilateral contract - a promise of the house in return for their set 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…

If the daughter-in-law continues to pay all the building society instalments, the couple will be entitled to have the property transferred to them as soon as the mortgage is paid off; but if she does not do so, then the Building Society will claim the instalments from the father's estate and the estate will have to pay them. I cannot think that in those circumstances the estate would be bound to transfer the house them, any more than the father himself would have been.

…

In the present case it is clear that the father expressly promised the couple that the property should belong to them as soon as the mortgage was paid, and impliedly promised that so long as they paid the instalments to the Building Society, they should be allowed to remain in possession. They were not purchasers because they never bound themselves to pay the instalments, but nevertheless they were in a position analogous to purchasers. They have acted on the promise and neither the father nor his widow, his successor in title, can eject them in disregard of it.

Principle in Case:

1. When the offeree begins performing a unilateral offer, the offer can no longer be revoked, even if the offeree is still performing the unilateral offer. For instance, an offer to reward anyone who walks from town A to town B cannot be revoked once the offeree starts the walk. The widow-plaintiff was also estopped from revoking the offer.
2. A unilateral offer is accepted by performing the terms of the offer. Although the wife and her husband did not explicitly say that they had accepted to pay off the loan, the fact that they had begun doing so constituted an acceptance.