Legal Case Summary
Financings Ltd v Stimson [1962] 3 All ER 386
Contract law – Sale of goods – Agency
Facts
The case regarded a hire purchase transaction, in which the dealer was an agent of the finance company. The hirer paid a deposit of £70 to a dealer and agreed to purchase a motor car from the plaintiff, a finance company, for £414. The agreement held that it would become binding once the finance company had signed the document, which signalled acceptance. The company did not sign the contract until March 25, 1961. The hirer had taken the car away on March 18 and returned the car on March 20, stating he did not wish to continue with the purchase, offering to lose his deposit in order to exit the agreement. Both the dealer and hirer thought that the finance company had signed the document and had therefore accepted the agreement. On the night of March 24, the dealer’s shop was broken into and the motor vehicle was stolen. The finance company sought to recover the price of the motor car from the hirer.
Issue
The key issue for the court was whether the dealer had the authority to complete the contract with the hirer and importantly, whether a contract had been constructed.
Decision / Outcome
The court found that the dealer had the authority to receive acceptance and revocation from the purchaser. On this basis, when the hirer returned the car and revoked his offer, there was no longer a contract for the motor car. Further to this, the hirer was owed the car in the same condition as when the offer was made and when the finance company signed the agreement and accepted the contract on March 25, the car was not in the same condition and therefore there was no contract.
Updated 19 March 2026
This case summary accurately reflects the decision in Financings Ltd v Stimson [1962] 3 All ER 386, a Court of Appeal authority on offer and revocation in the context of hire purchase agreements. The core legal principles described — that an offer may be revoked before acceptance, that the dealer had authority to receive revocation on behalf of the finance company, and that acceptance of a materially altered subject matter cannot constitute valid acceptance of the original offer — remain good law and are still cited in contract law teaching and scholarship.
The hire purchase legislative framework has changed substantially since 1962 (the Consumer Credit Act 1974, as amended, now governs most consumer hire purchase arrangements, replacing the Hire Purchase Act 1964 and earlier legislation), but those statutory changes do not affect the contractual and agency principles for which this case is primarily cited. The case remains relevant as an illustration of offer and revocation doctrine and is unaffected by subsequent statutory development for those purposes. No later appellate decision has overruled or materially qualified it.
