• In Errington v Errington [1952], the Court of Appeal held that where a licence was granted under a contract (contractual licence), it cannot be revoked by the grantor if it would be contrary to the terms of the contract.

Facts of the case:

  • A father bought a house for £750 and took a mortgage for £500. His son and daughter in law moved into the house, and the father said that if they paid off the mortgage, the house would be theirs.
  • Therefore, the father granted the son and daughter in law a contractual licence to be in the premises.
  • The couple moved into the house, and they began paying the mortgage.
  • The father subsequently passed away, and the solicitor sought to revoke the contractual licence.

Issues in Errington v Errington [1952]

  • The issue in this case was whether the contractual licence could be revoked.

Held in the Court of Appeal:

  • The contractual licence could not be revoked because the son and daughter in law had embarked on their performance, and thus the contract could not be prevented.
  • It was immaterial that the son and daughter in law made no express promise to pay the mortgage- they had already embarked on their contractual performance of paying the mortgage.
  • Thus, as long as the couple paid the mortgage, and did not leave the performance ‘incomplete and unperformed’, they could live there.

Denning LJ:

  • [298] “They were, however, not bare licensees. They were licensees with a contractual right to remain. As such they have no right at law to remain, but only in equity, and equitable rights now prevail.”
  • [298] “law and equity have been fused for nearly 80 years, and since 1948 it has been clear that, as a result of the fusion, a licensor will not be permitted to eject a licensee in breach of a contract to allow him to remain”
  • [300] “in the present case it is clear that the father expressly promised the couple that the property should belong to them as soon as the mortgage was paid, and impliedly promised that so long as they paid instalments to the building society they should be allowed to remain in possession… they have acted on the promise and neither the father nor his widow, his successor in title, can eject them in disregard of it”