Wells v Devani
The court will be slow to find that parties who intended to be bound failed to make a contract, and can imply a missing term.
Facts
Mr Devani owned flats in a new development in London that he had been unable to sell. Mr Wells, an estate agent, telephoned him, and in a short conversation they agreed that Mr Wells would try to find a buyer for a commission of 2 per cent plus VAT. They did not expressly agree the event that would trigger payment, and Mr Wells did not provide Mr Devani with the written terms required by the Estate Agents Act 1979 until after he had introduced a buyer. The buyer, a housing association, bought the flats, but Mr Devani refused to pay the commission. The Court of Appeal held that there was no contract because the trigger for payment had not been agreed.
Legal principle
The Supreme Court allowed Mr Wells's appeal and held that there was a binding contract. Viewed objectively, the words and conduct of the parties showed that they intended to be bound, and a reasonable person would have understood that commission was payable on completion of a sale to a buyer introduced by Mr Wells, which is how estate agency agreements usually work. If that had not been the effect of what was said, the court would have implied a term to that effect. The courts are reluctant to find that an agreement is too vague or uncertain to be enforced where the parties believed they were making a binding contract and acted on it. The court reduced the commission because of the breach of the 1979 Act.
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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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.
