• Tue. Oct 3rd, 2023

    Unilateral Contracts in Property Law: Key Concepts and Case Studies


    Sep 19, 2023
    Unilateral Contracts in Property Law: Key Concepts and Case Studies

    Exploring Unilateral Contracts in Property Law: Key Concepts and Case Studies

    Unilateral contracts in property law are a fascinating area of study, offering a unique perspective on the dynamics of legal agreements. In essence, a unilateral contract is a type of agreement where only one party makes a promise or a commitment. The party that makes the promise, known as the promisor, is obligated to fulfill the terms of the contract if the other party, the promisee, decides to perform the requested action. The promisee, however, is not legally obligated to perform the action.

    This type of contract is often seen in property law, particularly in cases involving real estate transactions or lease agreements. For instance, a landlord might promise to reduce a tenant’s rent if the tenant agrees to make certain improvements to the property. The tenant is not obligated to make these improvements, but if they do, the landlord is legally bound to reduce the rent.

    One of the key concepts in understanding unilateral contracts is the idea of acceptance. In a traditional bilateral contract, acceptance occurs when both parties agree to the terms of the contract. However, in a unilateral contract, acceptance is not established through mutual agreement, but rather through performance. In other words, the promisee accepts the contract by performing the requested action.

    This concept was famously illustrated in the landmark case of Carlill v Carbolic Smoke Ball Company in 1893. The company had advertised that they would pay £100 to anyone who contracted influenza after using their product, the ‘smoke ball’, as directed. When Mrs. Carlill used the product and subsequently contracted influenza, she claimed the reward. The company refused to pay, arguing that their advertisement was not a serious contractual offer. However, the court ruled in favor of Mrs. Carlill, stating that the company’s promise constituted a unilateral contract, which Mrs. Carlill had accepted by performing the requested action – using the smoke ball as directed.

    Another key concept in unilateral contracts is the idea of revocation, or the ability of the promisor to withdraw the offer. Generally, the promisor can revoke the offer at any time before the promisee performs the requested action. However, there are exceptions to this rule. For instance, if the promisor receives a benefit from the promisee’s performance, they may not be able to revoke the offer.

    In the 1960 case of Petterson v Pattberg, the defendant had offered to reduce the plaintiff’s mortgage debt if the plaintiff paid a certain amount by a specific date. The plaintiff attempted to make the payment before the deadline, but the defendant had already sold the mortgage to a third party. The court ruled that the defendant could not revoke the offer because he had received a benefit from the plaintiff’s performance – the payment of the mortgage debt.

    In conclusion, unilateral contracts in property law present a unique set of challenges and opportunities. They offer a flexible approach to contractual agreements, allowing one party to make a promise without requiring a reciprocal commitment from the other party. However, they also raise complex issues around acceptance and revocation, as illustrated by the landmark cases of Carlill v Carbolic Smoke Ball Company and Petterson v Pattberg. As such, they continue to be a rich area of study and practice in property law.