Financings Ltd v Stimson  3 All ER 386
Contract law – Sale of goods – Agency
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.
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.
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.