Hardwick v Johnson  1 WLR 683
Mother purchased house for son and daughter-in-law to live in; whether lease or license
Mrs Hardwick purchased a house in Wiltshire for £12,000 for her son and his wife to live in. It was agreed that Mr and Mrs Johnson would pay Mrs Hardwick £7 a week, and this was supposed to pay off the purchase price. The couple made a few payments but they then ceased, and Mrs Hardwick did not chase the outstanding payments. Mrs Johnson became pregnant, and Mr Johnson left her for another woman leaving her in the family home. Mrs Hardwick sought possession of the house.
Mrs Hardwick contended the parties had orally agreed that she would grant a license to occupy the property, providing her son repaid the purchase price to her in weekly instalments of £7 per week. Alternatively, she claimed the agreement amounted to a joint weekly tenancy, which was terminated upon her having given Mrs Johnson notice to quit. Mrs Johnson argued a joint tenancy had been created, and that serving notice upon her husband was ineffective in terminating the tenancy. She claimed to have paid rent to Mrs Hardwick which had been returned and she argued that she was a protected statutory tenant.
The agreement was held to be a joint contractual license. Where informal family agreements are made and the parties do not consider what will happen if the relationship breaks down, the court must determine the legal nature of the relationship by imputing an intention to the parties which they, in truth, never actually formed. The most suitable legal relationship was one of a joint contractual license which Mrs Hardwick could not revoke until some event occurred which would justify determining the agreement.