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"My Wife and I” – Making a Contract for Other Parties

The Court of Appeal has recently had to decide on the validity of a contract which a husband had purported to enter into on behalf of his wife and himself where it turned out he had no authority to do so. 

The couple had attended a sales fair and the husband signed up to a contract to purchase an “aparthotel” room in the Park Plaza Hotel at Westminster Bridge which had been developed and sold by the Claimant.  Unfortunately whilst the husband was at the presentation and signed up for the contract on behalf of the couple, his wife had in fact spent most of the day outside looking after their children.  When told about the contract the Court found that she was “quite annoyed about that …

The husband had entered into the contract which described his wife and him as joint purchasers.  Although he paid a significant deposit, he could not raise the balance and defaulted on the contract.  The Claimant developer forfeited the deposit which the husband then sought to recover arguing that there was no binding contract because he did not have his wife’s authority to sign the document on her behalf. 

In the lower court, the husband succeeded but the developer appealed and was successful.  The Court of Appeal set aside the decision that no contract had been made and found instead that the Claimant had entered into a contract with the husband alone and not with the husband and wife jointly.  That was because he had no authority to enter into the contract on her behalf.  An important consideration for the Court was that the contract document had provided that the obligations of the buyers were to be joint and several.  The Court of Appeal reaffirmed the general position that joint and several liability brings into being one joint obligation and as many several obligations as there are joint and several promisors. 

That meant that the husband was, “contractually bound under his several contract with the appellant to purchase the property” despite the fact that there was no contract between the developer and the wife.

The issue of general application here is that any multiparty contract which has a term imposing joint and several liability is effectively severable if the contract can be challenged by some but not all of the purported contracting parties.

If you would like any further information contact James Staton on 01274 306 000.  

 

About the Author

James Staton

Partner

James is a Partner and Head of the Dispute Resolution team and primarily handles commercial…

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