As any law student learns in their first week at university, the base elements of any contract are offer, acceptance and consideration. Underlying that simple statement there is, however, a hinterland of complexity – as was shown by a case concerning parking ticket ‘pay and display’ machines which give no change.
A car park provider sought a very substantial rebate from HM Revenue and Customs (HMRC) in respect of VAT remitted on overpayments made by customers into ticket machines. It was submitted that such overpayments were ex gratia and thus fell outside the scope of VAT. The opposing view taken by HMRC – that the entirety of sums paid into ticket machines should be viewed as consideration for the right to park – was, however, backed by the First-tier Tribunal and the Upper Tribunal.
In ruling on the provider’s challenge to the latter decision, the Court of Appeal noted that the machines in question display a warning that no change is given. Once sufficient, or more than sufficient, coins are fed into them, the customer obtains a ticket by pushing a green button. The machines state in terms that overpayments are accepted and that no additional parking time will be afforded to a customer who is constrained by not having the right change to overpay for a ticket.
In dismissing the appeal, the Court found that the charges levied by the provider for parking were in effect variable. Customers were required to pay a minimum sum for an hour’s parking, but the precise figure was only settled upon when they put coins into a machine and pressed the green button. Those actions represented, respectively, the payment of consideration and acceptance of the provider’s offer. There was no question of the customer having any right to recover any overpayment from the provider and, in those circumstances, the price agreed for the provision of parking was the sum actually paid into the machine.