UK: The Written Word Is Not Set In Stone

Last Updated: 25 May 2016
Article by Jonathan Brooks

The directors of well-run companies ensure that significant legal commitments are documented in writing and, where appropriate, entered into only after taking relevant legal advice.  But there is nothing to prevent binding legal obligations being entered into or varied orally or by conduct, and two recent cases in the Court of Appeal illustrate the dangers of assuming that the written word is set in stone.

In the first case, there was a dispute about whether a binding contract had been created.   Anotech International (UK) Ltd had been negotiating with Reveille Independent LLC to obtain a licence to use the "Masterchef" brand in marketing its cookware products in North America, and for its products to appear in three episodes of Masterchef.   Reveille sent Anotech a deal memo proposing terms for the licence, which stated it would "not be binding on Reveille until executed by both Licensee and Reveille".  Anotech returned a signed copy of the deal memo to Reveille, but the copy was marked with handwritten amendments and additions.  Both parties intended the deal memo would be replaced by a detailed agreement and drafts were circulated, but the negotiations eventually broke down.

In the meantime however, the relevant episodes of Masterchef were recorded and broadcast, and Anotech used the Masterchef brand at the Chicago International Home and Housewares Show, and in its sales literature.  It also participated in weekly conference calls between Reveille and Masterchef licensees.  Reveille sent an invoice to Anotech for payments due under the licence.  The invoice was not paid.

Eventually, Reveille sued for the payments due on the basis that there was a binding contract on the terms of the deal memo as marked up and signed by Anotech, notwithstanding that it had not itself signed the deal memo. Anotech argued no binding contract had been concluded.

The Court of Appeal held that Anotech's mark up constituted a counter-offer, which Reveille could accept.  Anotech would be bound once Reveille's acceptance was communicated to it.  The fact Reveille had not signed the deal memo was not conclusive, as it could demonstrate its acceptance by conduct, although it might make it more difficult to show that its acceptance had been communicated to Anotech.

It was clear that Reveille had carried out the work envisaged by the deal memo.  But Anotech argued this was in anticipation of a binding contract being made, rather than acceptance of Anotech's marked up deal memo.  The Court of Appeal disagreed.  The recording of the Masterchef episodes, the Chicago show and the inclusion of Anotech in the licensee conference calls were conduct by Reveille accepting Anotech's amended deal memo.  Its conduct thereafter was evidence the parties believed there was a binding contract in place. 

The case is unusual in that Reveille was arguing for a binding contract having been created, notwithstanding the provision that it would not be bound without having signed.  It shows the dangers for both parties in proceeding to act as though a contract were in place, when they do not wish to be bound by the proposed terms until contractual formalities have been completed. 

The second case concerned an exclusive supply agreement, under which TRW Lucas Varity Electric Steering Ltd agreed to purchase all its requirements of certain products from Globe Motors Inc.  TRW Lucas began to make purchases from a third party supplier.  Globe and its Portuguese subsidiary (Porto), incorporated to supply electric motors to TRW Lucas under the agreement, sued for breach of contract.  One of the issues was whether the agreement had been varied so as to include Porto as a party.

The agreement contained a provision that it could "only be amended by a written document which (i) specifically refers to the provision of this Agreement and (ii) is signed by both parties."  TRW Lucas argued that the agreement had not have been varied to include Porto as a party, as there had been no such written document. 

Prior to this case, there had been conflicting Court of Appeal decisions on whether such a provision meant the parties to an agreement were unable to amend it orally.  The Court reviewed the cases and concluded that an agreement can be amended by oral agreement or by conduct, notwithstanding a provision requiring amendments to be made in writing.  Although the principle of freedom of contract means the parties to a contract may agree whatever terms they choose, including terms regulating the manner in which the contract may be varied, the principle also means they can vary those provisions at will.

Such provisions do nonetheless have some practical effect.  Where an agreement contains such a clause, a party hoping to rely on informal communications or conduct to modify its contractual obligations may have greater difficulty in showing that both parties intended the communications or conduct to alter their legal relations.  In addition, the clause may make it clear that only certain people have authority to agree an amendment on behalf of a party.

These two cases illustrate the general principle that binding contracts, or contractual variations, can be made by word of mouth or by conduct and do not need to be set out in a formal document.  This can be a particular issue for larger companies with separate procurement or legal teams negotiating formal agreements, whose efforts may be undermined by the conduct of personnel "on the ground".

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.