Wilson Browne Solicitors
A gentleman’s word is his bond
We all know the saying, a gentleman’s word is his bond, but is it enough to do business on a hand- shake and a promise, and when can an agreement be interpreted as a binding contract? For a binding contract to exist, there are fi ve
fundamental principles; - off er - acceptance - consideration - intention to create legal relations - certainty
Contracts are best in writing, but it is accepted
that they can be entirely based on oral agreements. Even so, all fi ve fundamental principles must be present. The importance of certainty in a contract,
specifically an unwritten contract, has recently been illustrated in the case of Cooper v Dnata Catering Services Ltd [2022] EWHC 2216 (Comm).
In this case, the claimant (En Route International Ltd) agreed with the Emirates Group services unit to supply snack boxes for fl ights. T ere was no formal written contract in place, but the catering company claimant said there was an agreement for a three-year supply beginning in 2014, which was terminated early in 2016. T e judge rejected this argument because the implication was not strong enough that it was ‘obvious’ to both parties. T e claimant sought to rely on email correspondence with the
defendant in which the arrangement was discussed: Judge Jonathan Klein refused to accept that the email correspondence provided certainty on the contract because there was no price yet agreed, which is a fundamental element. T e claimant countered by arguing that there was an understanding
between the parties (in email) that the price would be ‘reasonable’ and that this should be suffi cient to consider there being a formal contrac- tual agreement. T e judge rejected this, saying, ‘such an agreement cannot be saved as a contract by the implication of a term that the price to be paid for each box was to be a reasonable sum’. T is case outlines the importance of certainty between parties and
the strengths of having written terms in place. A little time spent on ensuring your contracts are robust and meet the needs of the business can save a lot of time and money later.
For advice on this and other issues relating to business/commercial law, contact the Commercial Litigation team at Wilson Browne Solicitors on 0800 088 6004 or email
enquiries@wilsonbrowne.co.uk
ALL THINGS BUSINESS 47
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