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FactsEdit

Sudbrook was granted an option to buy a reversion in fee simple at not less than £12,000 as agreed by two valuers, one appointed by each party. If they could not agree to a value, an umpire was to be chosen by the valuers. When Sudbrook tried to exercise their option, Eggleton refused to appoint a valuer. The Court of Appeal claimed they could not appoint a valuer for Eggleton, and thus the option was unenforceable.

IssueEdit

  1. Is the contract unenforceable as the price cannot be determined?

DecisionEdit

Appeal allowed.

ReasonsEdit

Scarman asked whether the essence of the contract was a fair and reasonable price, or was it for the means of finding this price? He concluded that the parties wanted a fair and reasonable price and the valuation was simply a means to an end. He felt to defer to "ancient law" to invalid a simple formula for obtaining a price would be a public disservice.

Russell, in the dissent, held there is value to precedent. He felt the machinery chosen to determine the price had failed and there was no reason to punish the party who takes advantage of the clause agreed to by the parties.

RatioEdit

The agreement of a fair and reasonable price is more important than the machinery to get there.

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