The case of De Lassalle v Guildford [1901] 2 KB 215 is a seminal English contract law decision that explains the concept of collateral contracts and delineates an exception to the parol evidence rule.
| Citation: De Lassalle v Guildford [1901] 2 KB 215 |
| Court: King’s Bench Division |
| Parties: De Lassalle (tenant) and Guildford (landlord) |
| Legal Focus: Collateral Contract; Exception to the Parol Evidence Rule; Terms in a Contract |
Facts – De Lassalle v Guildford
Mr. De Lassalle agreed to lease a house from Mr. Guildford. Before signing the lease, De Lassalle sought assurance that the property’s drains were in good working order, as he had previously experienced issues with faulty drains. Guildford assured him that the drains were satisfactory. Relying on this assurance, De Lassalle signed the lease. However, after moving in, he discovered that the drains were defective.
De Lassalle sued Guildford for breach of contract.
Issue
Was Guildford’s verbal assurance regarding the drains legally binding, despite the fact that it was not contained in the written lease?
Court’s Decision: De Lassalle v Guildford
The court held that Guildford’s assurance constituted a collateral contract.
Although the parol evidence rule generally prevents the introduction of oral statements that alter or contradict a written agreement, an exception exists for collateral contracts. Because De Lassalle entered into the main lease agreement based on Guildford’s promise regarding the drains, this separate oral agreement was enforceable. As a result, Guildford was found to have breached the collateral contract and was liable for damages.
Legal Principles
Collateral Contract:
A collateral contract is a separate agreement that exists alongside the main contract. For such a contract to be enforceable, it must meet the standard contractual requirements: offer, acceptance, consideration, and the intention to create legal relations. In this case, Guildford’s promise about the drains served as the offer, De Lassalle’s reliance and subsequent signing of the lease constituted acceptance and consideration, and both parties intended the promise to be binding.
Exception to Parol Evidence Rule:
Collateral contracts can serve as an exception, allowing oral statements to be admissible even when a written contract exists. Although the written lease did not mention the drains, the assurance was a separate promise that induced De Lassalle to enter into the lease and was thus, enforceable.
References:
- https://www.lawteacher.net/free-law-essays/contract-law/parol-evidence-rule-contract-law-essay.php
- https://www.oup.com.au/__data/assets/pdf_file/0034/194659/chew2e_BLG2_chapter4.pdf
- https://s3.studentvip.com.au/notes/8035-sample.pdf
- https://s3.studentvip.com.au/notes/9199-sample.pdf
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Ruchi is a legal research writer with an academic background in CA, MBA (Finance), and M.Com. She specializes in digesting and summarizing complex judicial decisions into clear and structured case notes for students and legal professionals.