Introduction
A unilateral contract is a legally binding agreement where one party, the offeror, makes a promise in exchange for the performance of a specific act by another party, the offeree. Unlike bilateral contracts, which involve mutual promises, a unilateral contract is accepted not by a reciprocal promise, but by the actual completion of the requested act. The technical principle governing these contracts centers on the offeror's obligation not to revoke the offer once the offeree commences performance. Key requirements for the formation of a unilateral contract include a clear offer, a clear acceptance through the complete performance of the act, and the intention to create legal relations. The decision in Soulsbury v Soulsbury [2007] EWCA Civ 969 provides a significant contribution to the understanding of these requirements, specifically the point at which revocation becomes impossible.
Soulsbury v Soulsbury: The Core Principle
The case Soulsbury v Soulsbury presents a scenario illustrating a unilateral contract's operation. The case involved a promise made by a deceased man to his ex-wife. He stated she would receive £100,000 if she did not enforce a court order for alimony. Following his death, the ex-wife pursued the enforcement of the contract against his estate, claiming a binding agreement existed. The Court of Appeal agreed with her, holding that a valid unilateral contract had been formed. The critical aspect of this case lies in its affirmation of the principle established in Errington v Errington: a unilateral contract cannot be revoked once the offeree has begun performing the condition stipulated in the offer. Longmore LJ, in his judgment, explicitly equated this scenario with the classic examples of unilateral contracts, such as the Carlill v Carbolic Smoke Ball case, where the act of using the smoke ball constituted acceptance.
Acceptance Through Performance
The judgment in Soulsbury v Soulsbury clarifies that the acceptance in a unilateral contract is not a communicated agreement, but rather the performance of the requested act. The action of refraining from enforcing the alimony order serves as the acceptance, not a separate notification of that intent. This concept distinguishes unilateral contracts from their bilateral counterparts where communication of acceptance is vital to the contract's formation. In Soulsbury, the ex-wife's action of not suing was deemed sufficient to constitute the required performance, although there was no explicit agreement to not sue. This makes it a crucial aspect for establishing the contract's legal validity. As Longmore LJ stated, the offeror is not able to withdraw the offer once the promisee acts on the promise, in this instance by not pursuing maintenance payments.
The Obligation Not to Revoke
The decision in Soulsbury v Soulsbury reaffirms a key point regarding unilateral contracts: the offeror is obligated not to revoke their offer once the offeree begins performance. The court referenced the classic examples of unilateral contracts, including the "walk to York" scenario. In this hypothetical, someone is promised payment for walking to York. Once the person starts walking, the offeror is restricted from revoking the promise. In Soulsbury, the ex-wife did not explicitly promise she would not sue, but the start of her inaction in doing so created a contractual obligation for the deceased's estate. This principle is further reinforced by the commentary surrounding the Daulia Ltd v Four Mill Bank Nominees Ltd case, in which it was held that there is an implied obligation on the offeror not to prevent the condition being satisfied, as soon as the offeree starts to perform.
The Completed Act and Contractual Binding
In Soulsbury v Soulsbury, the performance, that is, the refraining from suing, was deemed to be completed upon the husband's death. This point of completion is important because it fixes the offeror's liability. While the ex-wife could have technically chosen to enforce the alimony order at any time, the fact that she did not constitutes her fulfillment of the requested performance. The case contrasts with Errington v Errington, where the offeree had not completely performed their part of the contract, where the contract was not fully formed until the mortgage was completely paid. In Soulsbury, the court explicitly stated that the contract became binding once she did not sue for maintenance until her ex-husband passed. The completion of the act solidifies the offeree's entitlement to the promised benefit under the unilateral contract.
Implications and the Broader Context
The Soulsbury v Soulsbury decision has significant ramifications for contract law. It provides clarity on the operation of unilateral contracts, reinforcing the protection afforded to offerees who begin performance in reliance on a unilateral promise. The case reinforces the principle that fairness and equity play significant roles in the interpretation of contracts, particularly in situations where the offeror attempts to evade their obligation after the offeree has already committed to action. The judgment connects with precedents established in cases such as Errington v Errington, showing a consistent line of judicial interpretation on this specific aspect of contract law. These cases are often discussed together to show a clear line of progression in this area of contract law, from Errington, where the performance had not yet been completed to Soulsbury, where it had.
Conclusion
Soulsbury v Soulsbury represents a critical clarification in the realm of unilateral contracts. The core principle establishes that the offeror becomes obligated not to revoke the offer once the offeree begins performance of the stipulated act. The case also highlights that acceptance in such a contract is manifested through the actual performance, not via a communicated promise, as seen in bilateral contracts. The decision integrates the principle from Errington v Errington concerning revocation, and adds that the unilateral contract becomes completely binding when the act is fully performed, as it was upon the death of the husband in the Soulsbury case. This judgment not only reiterates previous rulings on contract formation, but it also reinforces the view that once an offeree begins to act in response to a unilateral offer, the offeror is legally bound.
