G Scammell and Nephew Ltd v Ouston

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G Scammell and Nephew v HC&JG Ouston [1941] AC 251

Contract law – Contract terms – Sale of goods

Facts

Ouston agreed to purchase a new motor van from Scammell but stipulated that the purchase price should be set up on a hire-purchase basis over a period of two years, with some of the figure being part-paid by a van that Ouston already owned. Before the hire purchase terms had been agreed, Scammell refused to proceed with the sale and as a result of this, Ouston brought a claim for breaching the contract for the supply of the vehicle. Scammell claimed that the hire-purchase agreement had not been implemented and therefore neither party was bound and the agreement was void on the basis of uncertainty. The trial judge awarded Ouston damages as it was believed that the contract had been wrongly repudiated. Scammell appealed to the Court of Appeal who dismissed his action. Scammell re-appealed the decision of the trial judge to the House of Lords.

Issue

The court was required to establish whether the parties had agreed and constructed a contract. Specifically the court was required to consider the phrase ‘on hire purchase terms’ and whether this could satisfy the law and bind the parties. Scammell argued that the term was too vague to be binding. Ouston argued that there was clearly contractual intention and this was enough to constitute the agreement between the parties.

Held

The court found that the clause regarding the hire-purchase terms was so vague that there could not be a precise meaning derived from it. As a result of this finding, there was no enforceable contract between the parties and the appeal was dismissed. 

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