A recent case has seen the courts confirm that a binding contract can exist even if it’s only been signed by one of the parties. In Anchor 2020 Ltd v Midas Construction Ltd (2019) EWHC 435 (TCC), Midas were engaged by Anchor to build retirement accommodation and whilst it was intended they would enter into a JCT Design & Build contract, that never happened. Instead the works progressed under a series of letters of intent until some 9 months into the project when Midas alone signed the contract.
When there was a subsequent dispute about the contents of the risk register Midas added to the contract when signing it, the parties took the matter to court to decide if a contract had in fact come into existence.
As already mentioned, the court decided that it had. They reasserted the principle that “Whether there is a binding contract depends…not upon their subjective state of mind, but upon a consideration of what was communicated between them by words or conduct…Even if certain terms of economic or other significance to the parties have not been finalised, objective appraisal of their words and conduct may lead to the conclusion that they did not intend agreement of such terms to be a precondition to a concluded and legally binding agreement.”.
Following on the heels of Arcadis Consulting (UK) Ltd v AMEC (BSC) Ltd (2018) EWCA 222, (in which working under a “letter of intent” could have left a contractor facing a £40m claim), this case is a further reminder of the potential risks of working without a formal contract in place
For further information on the above or to ask a question, please contact Simon Franklin on 01223 791008 or email [javascript protected email address].
The information on this site about legal matters is provided as a general guide only. Although we try to ensure that all of the information on this site is accurate and up to date, this cannot be guaranteed. The information on this site should not be relied upon or construed as constituting legal advice and Howes Percival LLP disclaims liability in relation to its use. You should seek appropriate legal advice before taking or refraining from taking any action.
To contact us, please fill out this form and we will get back in touch as soon as possible. Your personal data will be processed in accordance with our privacy policy which can be found here.
Thank you for your enquiry. We will respond as soon as possible.
