Wells v Devani [2019] UKSC 4

KEY POINTS

• The absence of explicit agreement on a term does not automatically render the contract void due to uncertainty. If the parties have implicitly agreed on those terms, it will be sufficient for the contract to be considered valid.

• If the parties have the intention to create a contract and have already started acting as if there is one, the court can add any essential term to the agreement to make it work effectively.

• Furthermore, the court can imply a term if it is clear from the circumstances that any reasonable bystander would think the parties must have intended it.

FACTS

• In 2007, Mr. Wells finished constructing a block of flats, but by early 2008, seven flats remained unsold. Mr. Devani, an estate agent, offered to sell the unsold flats.

• After receiving the email, Mr. Devani acknowledged it and called Mr. Wells. Mr. Devani claimed that during their phone call, he informed Mr. Wells that he was an estate agent and that his commission terms were 2% plus VAT, while Mr. Wells denied being informed of any commission.

• Subsequently, Mr. Devani found a purchaser of the remaining flats. The transaction was completed, and Mr. Devani sought his commission.

• However, Mr. Wells refused to pay, leading Mr. Devani to initiate legal proceedings.

COMMENTARY

• The ruling reaffirms the courts' commitment to objectively interpret contracts and determine the intentions of the parties involved.

• This decision provides clarity on the formation of oral contracts and underscores the significance of clear communication and documentation in contractual agreements.