Swing back to freedom of contract view.
There was right of pre-emption over mortgaged
property, exercisable after redemption.
House of Lords unanimously held this valid.
Lord Parker test –
Is term repugnant to right to redeem?
Viscount Haldane LC’s test –
Courts should be prepared to recognise a ‘collateral
undertaking, outside and clear of the mortgage’.
This would not require separate agreement, and it
would be no objection that entry into the mortgage is conditional on the
major shift in law, telling us there could be two separate contracts.
But doesn’t tell us how to disentangle them]