White & Carter (Councils) Ltd v McGregor [1961] UKHL 5
Citation:White & Carter (Councils) Ltd v McGregor [1961] UKHL 5
Rule of thumb:: If you agree a contract then suddenly get cold-feet and don’t want to do it, can you still back out? Yes, possibly, Where a party enters a contract, and then notices very shortly after, before the contract starts, that they made a genuine mistake about it, then there is a ‘cool-off’ period where a person can still renege on a concluded contract and have it cancelled.
Background facts:
The facts of this case were that McGregor entered into a contract with the Council to advertise on their bins for 3 years. With this contract set to expire McGregor agreed for a renewal with it. McGregor then later had a change of heart and decided that he did not want the contract to go ahead. The Council refused this and stated that McGregor was bound by it. McGregor refused to pay and so the matter ended up in Court.
Parties argued:
The Council argued that the offer and acceptance process had been validly followed and that a legitimate contract was formed. McGregor argued that an offer and acceptance exchange was not complete until a cool-off period had ended, which it had not done, thereby giving them the right to rescind.
Judgment:
The Court upheld the arguments of the Council that the offer and acceptance exchange was completed so there was a valid contract. The Court did however accept the introduction of a 'cool-off' period being introduced as part of the offer and acceptance process. They held however that it did not apply in this instance because McGregor knew all the ins and outs of this contract having used it before, with this being a renewal. However, the Court affirmed that if people could provide a legitimate reason for wanting out of a contract shortly after completing the offer and acceptance process, usually by researching something in greater detail that they were not made aware of prior to completing the contract, then they could still go back on the deal - offer and acceptance has to be validly exchanged and then have a cool-off period before the deal is 100% completed.
Ratio-decidendi:
‘saddled themselves with an unwanted contract causing an apparent waste of time and money... (the cool-off period is a)... novel equitable doctrine that a party was not to beheld to his contract unless the court in a given instance thought it reasonable so to do...’, Lord Hodson
'a party ... not beheld to a contract ... unless... reasonable to do so', Lord Hodson
Warning: This is not professional legal advice. This is not professional legal education advice. Please obtain professional guidance before embarking on any legal course of action. This is just an interpretation of a Judgment by persons of legal insight & varying levels of legal specialism, experience & expertise. Please read the Judgment yourself and form your own interpretation of it with professional assistance.