Anderson v Lambie , [1954] UKHL 3
Citation:Anderson v Lambie , [1954] UKHL 3
Rule of thumb:Where 2 parties spend a long time negotiating a contract orally, and one party says that they will draft into a contract what they have discussed, and the other party just signs the contract on the basis of this assertion that it will largely follow their discussion, does the written contract supersede all the oral negotiations? No, the written contract does not supersede all previous oral discussions in these circumstances, and the contract can be reduced based on the misrepresentation that the contract would be the same as what they discussed.
Background facts:
The basic facts of this case were that the 2 parties – Anderson and Lambie - had been discussing the sale of a part of land for a certain price. They reached an oral understanding over what the contract would be and shook on it. Lambie stated that he would get his solicitors to draw up the conveyancing contract for it and Anderson replied that he would sign it and get it back to Lambie. The actual conveyancing contract drawn up by Labie's solicitors then massively extended the area of land in question. Anderson was not aware of this, meaning that he entered into a woeful contract and sold much more land to Lambie than he thought he was selling. Anderson sought the reduction of this agreement with Lambie. Lambie refused to do this, so Anderson took the matter to Court.
Parties argued:
Anderson argued that the negotiations had been a misrepresentation made to him by Lambie. He argued that he agreed the deal on a mistruth by Lambie that the deed would be as discussed. Anderson argued that even if Lambie had a change of heart and did not do this deliberately, it was a misrepresentation by silence for Lambie not to phone him and tell him he had changed his mind and adjusted the deal. Lambie argued that the requirements of writing and form applied - he argued that when a contract is agreed in writing all prior negotiations are irrelevant. Lambie argued that all that mattered was the signed final contract. Lambie further argued that the law of contract does not protect people from being lazy and stupid and not reading contracts before they sign them, like Anderson did. The Court upheld the arguments of Anderson.
Judgment:
The Court held that if a written deed is only just very different from negotiations, rather than radically different, then the requirements of writing apply and it is final. However, if the written deed is different in essential terms from what they discussed, as was the case in this case, then form and the requirements of writing do not apply. Anderson was able to get the land he sold back from Lambie and Lambie was given his money back by Anderson.
Ratio-decidendi:
‘being expressed as regards essentials in different terms from what the parties really intended and had agreed between them’, Lord Keith, 'But, when it is sought to reduce a deed, it is necessary to go behind the deed and discover the real facts. The fact that the parties agreed to the missives is important evidence but it is not the only competent evidence. The question is not what the missives mean: if that were the question, the ordinary rule would apply that the meaning of a document must be found from its terms. The question is whether the real facts are such that the disposition must be reduced, and the existence of the missives does not alter the nature of the inquiry’, Lord Reid
'essentials in different terms from what the parties ... agreed', Lord Keith
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.