Fordell Estates Limited v Deloitte LLP [2014] CSOH 55 considered whether the contents of email communications between chartered surveyors, as agents, could create a legally enforceable agreement between the parties.
Fordell leased premises to Deloitte at two locations in Edinburgh. Before the lease expired a schedule of dilapidations was issued to Deloitte, who disputed the scope and cost of remedial works.
The parties' surveyors entered into without prejudice discussions, culminating in an exchange of emails on 13th and 26th July, in terms of which Deloitte's agent tabled an offer of £338,000 on the condition that Fordell provided evidence that the works would actually go ahead – for example tender documentation. Fordell's agent simply replied that they would accept £338,000 subject to certain conditions. The response was silent as regards the tender documentation requested.
Fordell argued that all previous email correspondence had culminated with a concluded bargain on 26 July, which did not require Fordell to prove that any works would be carried out.
Notwithstanding the email exchanges, Lord Malcolm was not persuaded that both parties had a manifest intention to legally bind themselves to all elements of the bargain. The failure to address the issue of evidence (which condition had not been waived) together with the shared understanding that neither agent could bind the parties, provided clear evidence that there had been no meeting of the minds on key aspects of the deal.
Thus, when forming an agreement, three crucial questions should be answered:
- Does the person you are dealing with have the necessary authority?
- Is there an intention for the parties to be bound?
- Have all key aspects been agreed?
For the avoidance of all doubt - always reduce your final terms into a signed formal legal agreement.
Disclaimer
The material contained in this article is of the nature of general comment only and does not give advice on any particular matter. Recipients should not act on the basis of the information in this e-update without taking appropriate professional advice upon their own particular circumstances.
