Understand the Court’s Decision in Mund v. English: Why Oral License Promises Cannot be Revoked

If a license to access a well was based on an oral promise, and the licensee built a residence in reliance on having access to the well, can the license be revoked? (Mund v. English)

No. A license that is based on an oral promise becomes irrevocable when the licensee makes valuable improvements to land on the basis of the promise.

In Mund v. English, the court held that if a license to access a well was based solely on an oral promise, and the licensee built a residence in reliance on having access to the well, then the license cannot be revoked. This is because revocation of the license would be inequitable and unfair to the licensee who has invested in the property in reliance on the promise to access the well.

The court further emphasized that such licenses are usually created in situations where enforcing formal real property rights would produce harsh, inequitable results. In such cases, licenses are granted for oral promises like allowing a neighbor to use a well or cross a property to access public roads, and they come into existence based on the parties’ conduct and expectations.

However, in order for the licensor to revoke the license, they must have a legitimate reason to do so. For example, if the licensee breaches any of the terms of the license agreement, the licensor may be justified in revoking the license. Moreover, if the licensor’s right to use the well is diminished or eliminated, they may revoke the license.

Overall, the court in Mund v. English emphasized that equity cannot be achieved if the licensee is deprived of a substantial investment in the property. Thus, the licensee’s reliance on an oral promise is an essential factor in determining whether a license can be revoked or not.

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