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.
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
- Adams v Lindsell (1818) 1 B & Ald 681
- Blackpool and Fylde Aero Club Ltd v Blackpool Borough Council [1990] 1 WLR 1195
- Brinkibon Ltd v Stahag Stahl und Stahlwarenhandelsgesellschaft mbH [1983] 2 AC 34
- Butler Machine Tool Co Ltd v Ex-Cell-O Corp (England) Ltd [1979] 1 WLR 401
- Byrne & Co v Van Tienhoven & Co (1880) 5 CPD 344
- Carlill v Carbolic Smoke Ball Co [1893] 1 QB 256
- Dickinson v Dodds (1876) 2 Ch D 463
- Entores Ltd v Miles Far East Corp [1955] 2 QB 327
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