LUXOR v COOPER

General Principle:

The terms of a contract may allow an offerer to revoke his promise even after it has been partially accepted by performance.

Name:

Luxor v Cooper [1941] 1 All ER 33, HL

Facts:

Cooper made an agreement with an estate agent, Luxor, that £10,000 would be paid to them if Luxor was able to find a buyer that would pay £175,000 the land. The agreement between Luxor and Cooper was a standard agreement that could be expected from any seller and estate agent: that Cooper would pay the commission once the house was sold and Cooper would not pay if a buyer was not found. Luxor found a buyer but Cooper actually sold the land (two cinemas) to someone else. Luxor pursued Cooper for the fee stating that they had fulfilled the contract.

Ratio:

The House of Lords in Luxor v Cooper held in favour of Cooper on the grounds that there was no reason to assume a responsibility by not revoking their offer. Lord Wright said obiter: “it is well recognized that there may be cases where obviously some term must be implied if the intention of the parties is not to be defeated, some term of which it can be predicated that ‘it goes without saying’…some term not expressed but necessary to give to the transaction such business efficacy as the parties must have intended.”

Application:

It is more likely that the courts would agree with an argument for an implied term (see relevant section) if that term were reasonable. They will not imply terms into a contract just because it would be reasonable to do so. This is an important principle to remember when applying it to practical scenarios. A party that has carelessly made a very unfavourable contract will argue that some kind of implied term, which, if it were to exist, would make the contract fair. That, it must be understood, is not a good enough reason to imply a term.

Analysis:

There is a fourth analysis suggested that is the terms of a contract may allow David to revoke his promise even after it has been partially accepted by performance Anna. In Luxor v Cooper, the House of Lords held in favour of Cooper on the grounds that there was no reason to assume a responsibility by not revoking their offer of commission to be paid on the sale of land, when Cooper sold to someone else. Lord Wright said obiter:

“it is well recognized that there may be cases where obviously some term must be implied if the intention of the parties is not to be defeated, some term of which it can be predicated that ‘it goes without saying’…some term not expressed but necessary to give to the transaction such business efficacy as the parties must have intended.”

David can argue that revocation is possible before performance has been completed because it was reasonable to do so, even if the Anna has made considerable effort.