Option to Purchase in UK Law

This hire purchase agreement was, at the material time, more analogous to a simple hiring than to a purchase. It had a contingent option to purchase of which the defendant might have availed himself in two years time but in September the defendant could, as a hirer, refuse to go on with the transaction since the plaintiffs, in spite of repeated requests, were still consistently refusing to honour their obligations.

I see no reason for reading the Article in that limited way. Transferring a share involves a series of steps, first an agreement to sell, then the execution of a deed of transfer and finally the registration of the transfer. Moreover the ordinary meaning of "transfer" is simply to hand over or part with something, and a shareholder who agrees to sell is parting with something. The context must determine in what sense the word is used.

The true distinction is between those cases where the mode of ascertaining the price is an essential term of the contract, and those cases where the mode of ascertainment, though indicated in the contract, is subsidiary and non-essential�see Fry on Specific Performance (6th Edition) paragraphs 360, 364.

I cannot accept that, however, because a right of pre-emption gives no present right, even contingent, to call for a conveyance of the legal estate. The grantee cannot require him to do so, or demand that an offer be made to him. Moreover, even if the grantor decides to sell and makes an offer it seems to me that so long as he does not sell to anyone else he can withdraw that offer at any time before acceptance.

The question whether there has been a total failure of consideration is not answered by considering whether there was any consideration sufficient to support a contract or purported contract. The test is whether or not the party claiming total failure of consideration has in fact received. any part of the benefit bargained for under the contract or purported contract.

The decision of Finnemore J. in Warman v. Southern Counties Car Finance Corporation (1949) 2 KB 576 was to the same effect. The plaintiff was buying a car on hire purchase when he became aware that a third party was claiming to be the true owner of the car. But he nevertheless went on paying the remaining instalments and then the necessary nominal sum to exercise his option to purchase.

On the same day as Step 1, the Captive Leasing Companies leased the cars pursuant to hybrid HP/lease agreements to dealership companies in the Pendragon Group ("the Dealerships"). Each of the Captive Leasing Companies entered into a "Vehicle Demonstrator Hire Agreement" (referred to as a hybrid lease) in favour of the Dealerships.