Chatty Emails Do Not Make Contract
25th September, 2013
In a warning to the business community that it can sometimes be hazardous to mix business with pleasure, a judge has emphasised that ‘chatty’ emails, partly devoted to discussion of the provenance and vintage of fine wine, did not conclude a property joint venture contract potentially worth millions.
At a time when the negotiating parties were on cordial terms, it had been agreed by a property development company that a consultancy company would be paid 20 per cent of the gross profits on any projects to which the latter introduced the former.
The consultancy company introduced the developer to an opportunity to develop a block of student housing that had proved highly successful and was projected to generate profits in excess of £8 million. However, following a falling-out between the parties which led to termination of their business relationship, a dispute arose as to whether or not the consultancy company was entitled to 20 per cent commission on those profits.
The High Court noted that the contractual dispute had arisen due to the ‘high level of informality’ in the negotiations between the parties, whose email correspondence was littered with ambiguous shorthand phrases and references to extraneous matters – including the relative merits of different vintages of claret.
Negotiations following the end of the parties’ business relationship had, at points, become ‘hopelessly muddled and confused’. Describing the dispute as ‘regrettable’, the Court noted that it faced a difficult task in attempting to extract evidence of the parties’ intentions from informal email traffic.
A critical email that had sought to set out the terms of agreement had been silent on the issue of the consultant’s commission and the Court concluded that, on a proper interpretation of the available evidence, the consultancy company had relinquished any entitlement to a share of profits from the development.
For more information on this or any other issues please contact Emma McGlinchey on 01244 405567 or email [email protected]
You might also be interested in...
9th August, 2018
We have been approached by a number of clients who have received a statutory demand, either personally or to their company, and they have asked us what to do about it. One business was contacted by a company demanding payment of a debt owed under a contract for TV advertising in a shopping mall. We presume – but... Read More »
3rd August, 2018
Agriculture and Estates specialist Ben Brassington has strengthened the services offered by Top 200 legal firm Aaron & Partners LLP A dairy farmer with more than 18 years’ experience as a Partner in his family’s farming business has been appointed by a top legal firm in Shrewsbury. Ben Brassington, who has also been working for several years as... Read More »