Dahlia v Four Millbank Nominees [1978] Ch 231
Contract – Unilateral Contract – Performance – Offer – Revocation – Land of Property Act 1925
Facts
This case concerns selling property. The complainant, Dahlia, wanted to purchase property from the defendants, Four Millbank Nominees. The parties had agreed terms orally, but there was no written contract between them. Four Millbank Nominees promised the complainant that if a banker’s draft was arranged for the deposit and this was completed before 10am on the 22nd December, a written contract would be drawn up. Dahlia proceeded to fulfil this request, but the defendants refused to complete the sale of the property.
Issues
The courts initially dismissed the complainant’s claim, as it did not comply with section 40(1) of the Land of Property Act 1925. However, this decision was appealed. The complainant argued that a unilateral contract existed between the parties and that the defendants were therefore bound to complete the written contract for the property. The issue in this case was whether there was a unilateral contract and if the offer could be revoked after performance began.
Decision/Outcome
It was held that a unilateral contract did exist, but this could not be effective as it did not comply with section 40(1) of the Land of Property Act 1925; the appeal was dismissed. The court stated that until performance, an offeror can revoke the offer he has made at any time. There would be no binding contract between the two parties. However, once the offeree has begun performance, the offer comes into effect and it can no longer be revoked by the offeror to the contract.
Updated 19 March 2026
This case summary remains accurate as a description of the decision in Dahlia Ltd v Four Millbank Nominees Ltd [1978] Ch 231 and the principles discussed therein regarding unilateral contracts and revocation of offers. However, readers should note one important statutory development: section 40(1) of the Law of Property Act 1925, which the article identifies as central to the decision, was repealed and replaced by section 2 of the Law of Property (Miscellaneous Provisions) Act 1989. Section 2 imposes a stricter requirement than the old section 40, requiring contracts for the sale or other disposition of an interest in land to be made in writing incorporating all expressly agreed terms, signed by or on behalf of each party. The old section 40 requirement of a written memorandum or part performance no longer applies to contracts entered into after 27 September 1989. The equitable doctrine of part performance, which was also relevant under the old law, was abolished alongside section 40. The core contract law principles discussed in the case regarding unilateral contracts and revocation remain good law, but the specific statutory framework on which the outcome turned has been superseded. Students should ensure they apply section 2 of the 1989 Act when considering current land law problems involving contracts for the disposition of land.
