The Gazette 1974

thing. The reason why none of those writings satisfied the Statute was because none of them contained any recognition or admission of the existence of a contract. In Gallie v. Lee ([1969] 2 Ch 17, 37) his Lordship said, "We are, of course, bound by the decisions of the House, but I do not think we are bound by prior decisions of our own; or, at any rate, not absolutely b o u n d . . . . It is very, very rarely that we will go against a previous decision of our own, but, if it is clearly shown to be erroneous, we should be able to put it right." However, his Lordship had not yet persuaded all his brethren to agree with this view. In Young v. Bristol Aeroplane Co. ([1944] KB 718) Lord Greene, Master of the Rolls, set down the cir- cumstance in which the Court of Appeal would not be bound by a previous decision of its own. The relevant one here was that "The court is entitled and bound to decide which of two conflicting decisions of its own it will follow". Applying that in the present case his Lordship thought that the principle contained in the recent "subject to contract" cases was an illegitimate extension of the "offer in writing" cases. It was in con- flict with the principle laid down by the Exchequer Chamber in Buxton v. Rust ([1872] LR 7 Ex 1) and the Court of Appeal in Thirkell v. Cambi that "in order to be a sufficient memorandum, there must be a signed admission that there was a contract and a signed ad- mission of what that contract was". In his Lordship's opinion, therefore, their Lordships were not bound to follow Law v. Jones. The legal pro- fession should be freed from the anxieties which beset them and that should be done without delay. His Lord- ship would hold that Law v. Jones was wrongly decided and should be overruled. The writing here, being ex- pressly "subject to contract", was not sufficient to satisfy the Statute. There was no enforceable contract between the parties. There was not sufficient reason for entering a caution on the register and it should be vacated at once. Lord Justice Stamp, concurring, said that he could not reconcile the reasoning in Reuss v. Picksley with Lord Justice Buckley's reasoning in Law v. Jones that because the writing containing the offer could not record or acknowledge an existing coptract the line of cases, of which Reuss v. Picksley w^is one, supported the proposition that the note or memorandum did not need to do so. Faced with a conflict between Law v. Jones and earlier cases of equal authority, the court should, as it was entitled to do in accordance with Young v. Bristol Aeroplane Co. prefer the earlier authorities. Lord Justice Scarman, also concurring, said that he agreed in believing that Griffiths v. Young and Law v. Jones were in conflict with previous decisions of equal authority. For the reasons given in the preceding judge- ments his Lordship was convinced that Law v. Jones was wrongly decided and that the reasoning in Griffiths v. Young was erroneous in so far as it proceeded on the principle that the note or memorandum required by the section did not need to recognize the fact of agree- ment, provided it contained the terms. Leave to appeal to the House of Lords was con- ditionally given, but was not pursued. Circumstances in which Court of Appeal not bound by another Court of Appeal

Justice Willes said : "The only question is whether it is sufficient to satisfy the Statute that the party charged should sign what he proposes as an agreement, and that the other party should afterwards assent without writing to the proposal? As to this, it is clear, both on reason and authority, that the proposal so signed and assented to, does become a memorandum or note of agreement within the fourth section of the Statute." Lord Justice Bowen said In re New Eberhardt Com- pany ([1889] 43 ChD 118, 129): "We are bound by Reuss v. Picksley." During the past three years the "offer cases" had been extended far beyond the limit thus set by Lord Justice Bowen. They had been stretched so as to cover Correspondence which was expressly stated to be "sub- l e t to contract". Th at was done because the "offer cases" were thought to support a wide principle which was stated by Lord Justice Buckley in Law v. Jones (P- 1003) "It is not, in my judgment, necessary that the note or memorandum should acknowledge the existence of a contract. It is not the fact of agreement out the terms agreed upon that must be found re- corded in writing". In accordance with that principle, the court held that a solicitor's letter setting out terms subject to contract" was a sufficient writing to satisfy the Statute. The court said that the words "subject to contract" were a suspensive condition which could be waived by subsequent oral agreement between the Parties. They could be removed from the document by oral evidence ( Gr i f f i t h s v. Young ([1970] 1 Ch 671, b »5, 686, 687; and Law v. Jones, p. 1004). The court acknowledged that a letter which denied the very exis- tence of a contract would not satisfy the Statute (per Lord Justice Buckley), but held that the words "sub- ject to contract" were not to be treated as a denial of the contract, but only as imposing a suspensive con- hjtion, the subsequent waiver of which could be esta- blished by oral evidence (per Lord Justice Orr). Law v. Jones alarming Laa; v. Jones had sounded an alarm bell in the offices of every solicitor in the land. And no wonder. ^. 1 was the everyday practice for a solicitor who was ffistructed in a sale of land to start the correspondence W l t h a letter "subject to contract" setting out the terms ° r enclosing a draft. He did it in the confidence that it Protected his client, who was not bound by what had a ken place in conversation. The reason was that for oyer 100 years the courts had held that the effect of he words "subject to contract" was that the matter re- ffiained in negotiation until a formal contract was exe- r t e d ( Eccles v. Bryant [1948] 1 Ch 93). But Law v. Jones had taken away all protection from the client, meant that the client was exposed to the full blast * frauds and perjuryes" attendant on oral testimony. v en without fraud or perjury, he was exposed to °nest difference of recollections leading to law suits, ^rom which it was the very object of the Statute to save The decision in Griffiths v. Young could be justified ?h other grounds, but not the decision in Law v. Jones. / / a s it correctly decided? His Lordship did not think yyas. Lord Justice Russell dissented from the majority, n d his reasoning was convincing. His Lordship could o t see any difference between a writing which (i) e nied there was any contract; (ii) did not admit there as any contract; (iii) said that the parties were in „ e Sptiation; or (iv) said that there was an agreement subject to contract", for all that came to the same

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