{"id":4550,"date":"2018-04-29T16:47:04","date_gmt":"2018-04-29T16:47:04","guid":{"rendered":"https:\/\/www.riaabarkergillette.com\/uk\/?p=4550"},"modified":"2024-11-19T19:45:52","modified_gmt":"2024-11-19T19:45:52","slug":"part-2-crossing-dotting-makes-clear-enforceable-contracts","status":"publish","type":"post","link":"https:\/\/www.riaabarkergillette.com\/uk\/part-2-crossing-dotting-makes-clear-enforceable-contracts\/","title":{"rendered":"Part 2: Crossing and dotting makes for clear contracts"},"content":{"rendered":"\n<p>The basic requirements of a contract are that both sides have reached an <strong>agreement<\/strong>, which is intended to be <strong>legally binding<\/strong>, is supported by <strong>consideration<\/strong>, and is sufficiently <strong>certain and complete<\/strong> to be enforceable.<\/p>\n\n\n\n<p>Looking at those components in turn, in the case of <a href=\"https:\/\/www.judiciary.uk\/wp-content\/uploads\/2017\/07\/blue-v-ashley-2010726.pdf\" target=\"_blank\" rel=\"noopener\">Blue v Ashley<\/a>, Judge Leggatt revisited the evidence against each of the textbook requirements for a binding contract:<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-agreement-when-an-offer-is-made-and-accepted\">Agreement when an offer is made and accepted<\/h4>\n\n\n\n<p>The necessary agreement is reached either by the parties signing a document containing agreed terms or by one party making an offer which the other accepts by words or conduct. Typically, acceptance is at the point of promising to do something, except in \u2018unilateral contracts\u2019 where the contract is established when the recipient of an offer starts to perform the action required to earn the reward. In this case, it was argued that this was a unilateral contract, and the acceptance took place when he started work directed towards increasing the share price value. But the judge highlighted that an offer may not always be intended: \u201cThere can be circumstances in which a person uses the language of offer without expressing a genuine willingness to be bound\u201d, giving the example of someone saying at a party they will give you a million pounds if you can speak for a minute on a topic, in which circumstances no-one would reasonably think the words were meant to be taken seriously or to be legally binding.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-intention-to-create-a-legally-binding-contract\">Intention to create a legally binding contract<\/h4>\n\n\n\n<p>Even when a person makes a real offer which is accepted, it does not necessarily follow that a legally enforceable contract is created. It is a further requirement of such a contract that the offer, and the agreement resulting from its acceptance, must be intended to create legal rights and obligations which are enforceable in the courts and not merely moral obligations.<\/p>\n\n\n\n<p>Factors that may show that an agreement was not intended to be legally binding include where it is made in a social context if it was expressed in vague language, or if the promise was made in anger or jest. For example, Justice Leggat said: \u201cif two people agree to meet for a drink at an appointed place and time and one does not turn up, no one supposes that the other could sue to receive his wasted travel expenses.\u201d There must be the intention for a legally binding contract to be created.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-consideration\">Consideration<\/h4>\n\n\n\n<p>To be legally binding, an agreement must traditionally be supported by consideration, as English law will not enforce a promise for which nothing has to be done in return. So, if the offer to pay \u00a315 million on the Sports Direct share price reaching \u00a38 per share was simply accepted by Mr Blue, and he did not need to commit to doing anything to achieve the outcome, it would not give rise to a legally binding contract. But to qualify for the payment, Mr Blue had to \u201cget\u201d the Sports Direct share price to \u00a38, undertaking work which was aimed at increasing the share price to that level, so the requirement of consideration could be demonstrated.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"h-certainty-and-completeness-of-terms\">Certainty and completeness of terms<\/h4>\n\n\n\n<p>Even if there is an agreement and an intention to create legal relations, a contract will be unenforceable if its terms are too vague or uncertain. It is another ground on which Mr Ashley disputed Mr Blue\u2019s claim.<\/p>\n\n\n\n<p><strong>For more information on how to minimise the risk of commercial disputes, contact <a href=\"https:\/\/www.riaabarkergillette.com\/uk\/our-team\/qaiser-khanzada\/\" target=\"_blank\" rel=\"noopener\">M. Qaiser Khanzada<\/a><\/strong>.<\/p>\n\n\n\n<p><em>Note: This article is not legal advice; it provides information of general interest about current legal issues.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Making a case study of an enforceable contract: the judgement in the case of Blue v Ashley<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_coblocks_attr":"","_coblocks_dimensions":"","_coblocks_responsive_height":"","_coblocks_accordion_ie_support":"","footnotes":""},"categories":[16],"tags":[21,13],"class_list":["post-4550","post","type-post","status-publish","format-standard","hentry","category-insight-article","tag-company-commercial","tag-dispute-resolution"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.3 (Yoast SEO v27.3) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Enforceable contract - 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