Richards (Charles) Ltd v Oppenhaim 13 Jan 1950 [1950] 1 KB 616, CA

A buyer ordered a car body for delivery by a specific date. After waiving late delivery by continuing to press for it, the buyer gave the seller a final, reasonable deadline. The court held this notice made time of the essence again, so the buyer could validly refuse delivery when this new deadline was missed.

Facts

In 1947, the defendant, Mr Oppenhaim, placed an order with the plaintiffs, Charles Richards Ld, for a Rolls-Royce chassis and a custom-built body. The contract initially stipulated that the completed vehicle was to be delivered ‘on or about March 20, 1948’, and time was expressly stated to be of the essence. The plaintiffs failed to meet this delivery date. The defendant did not cancel the contract at this point and continued to press for delivery, thereby implicitly waiving the original time stipulation. By June 1948, with the car still not ready, the defendant’s patience expired. On June 29, 1948, he wrote to the plaintiffs, stating that he would not accept delivery of the car after July 25, 1948. The plaintiffs failed to complete the work by this new deadline, only finishing it in October 1948, at which point the defendant refused to accept the car. The plaintiffs sued for the contract price of the work done, and the defendant counterclaimed for the deposit he had paid for the chassis.

Issues

The central legal issue before the Court of Appeal was whether a party who has waived a contractual provision making time of the essence can subsequently make time of the essence again. Specifically, the court had to determine:

1. Could the defendant, having waived the original delivery date, unilaterally impose a new, final deadline?
2. If so, was the notice given on June 29, setting a final date of July 25, ‘reasonable’ in the circumstances?

Judgment

The Court of Appeal dismissed the plaintiffs’ appeal, finding in favour of the defendant, Mr Oppenhaim. The court affirmed the principle that where time was originally of the essence and has been waived, it can be made of the essence again by the aggrieved party giving reasonable notice to the party in default.

Reasoning of the Court

Lord Justice Denning provided the leading judgment. He explained that the defendant’s conduct after the initial failure to deliver in March amounted to a waiver or forbearance. By pressing for delivery, the defendant had led the plaintiffs to believe he would not insist on his strict legal right to cancel the contract for breach of the original time-sensitive condition.

It is a kind of estoppel. By his conduct he evinced an intention to affect their legal relations. He made, in effect, a promise not to insist on his strict legal rights. That promise was intended to be acted on, and was in fact acted on. He cannot afterwards go back on it.

However, Denning L.J. clarified that this initial waiver did not mean time was now ‘at large’ indefinitely. The defendant was entitled to bring the matter to a head and re-impose a time limit.

But it does not mean that the time is at large. The defendant can, by notice, bring the matter to a head… That notice must be a ‘reasonable’ notice.

The court then considered whether the four weeks’ notice given by the defendant was reasonable. Given that the plaintiffs had previously indicated the car was almost ready and had repeatedly promised imminent delivery, the court concluded that a one-month period was entirely reasonable. Since the plaintiffs failed to meet this new, reasonable deadline, the defendant was entitled to treat the contract as repudiated and refuse to accept the car.

In the circumstances a month’s notice was a reasonable notice. As the plaintiffs did not deliver the car within that time, the defendant was entitled to treat the contract as at an end… He was entitled to say ‘I will not now accept the car, and I am not liable to pay for it.’ He was also entitled to get back the money which he had paid for the chassis.

The court held that the defendant had lawfully cancelled the contract and was not liable for the price of the coachwork, and was further entitled to the return of his deposit for the chassis.

Implications

This case is a leading authority on the principles of waiver and reasonable notice in contract law. It clarifies that a party who has waived a stipulation that time is of the essence is not left without a remedy if the other party continues to delay performance. The decision provides a crucial commercial mechanism, allowing the innocent party to regain certainty by giving the defaulting party a final, reasonable opportunity to perform before terminating the contract. It balances the law of estoppel (which prevents a party from going back on a promise) with the need for contractual performance, establishing that forbearance is not a permanent surrender of rights but a temporary suspension that can be brought to an end by clear and reasonable notice.

Verdict: The Court of Appeal dismissed the plaintiffs’ appeal. Judgment was entered for the defendant on both the claim and the counterclaim.

Source: Richards (Charles) Ltd v Oppenhaim 13 Jan 1950 [1950] 1 KB 616, CA