Scammell and Nephew Ltd v Ouston

An agreement whose key terms are too vague to be given a definite meaning is not a binding contract.

Citation
[1941] AC 251
Court
House of Lords
Year
1941
Subject
Contract Law
Topic
Offer and acceptance

Facts

Ouston agreed to buy a new motor van from Scammell, trading in his old van in part exchange. The written order stated that the balance of the price was to be paid on hire purchase terms over a period of two years. Scammell later refused to supply the van, saying it was not satisfied with the condition of the old van, and Ouston sued for breach of contract.

Legal principle

The House of Lords held that there was no concluded contract. The phrase on hire purchase terms was so vague that no precise meaning could be given to it. Hire purchase agreements of the time varied widely in their terms, for example as to interest, the number of instalments and the rights of the parties on default, and there was no evidence of a usual form or of any previous dealings that could fill the gap. The court cannot make a contract for the parties, so an agreement that leaves essential terms uncertain is not binding.

Related cases on offer and acceptance

Studying contract law? Our tutors help you understand and apply cases like this in essays, problem questions and exams. Request a quote or browse our law notes.

Back to all law cases

This summary is for study and revision and is not legal advice. Although our case summaries are checked for accuracy, we do not guarantee that they are free from errors or omissions. Always read the full judgment for the court's reasoning.

Contact Us

Enquire about our bespoke academic solutions