Grant v Bragg – Case Summary

Grant v Bragg

Court of Common Pleas

Citations: [2009] EWCA Civ 1228; [2010] 1 All ER (Comm) 1166; [2010] CLY 630.

Facts

Bragg and Grant frequently entered into shareholder agreements, usually drafted by a third man, Jenkins, who acted as an agent between the two. In 2007, the pair began negotiating again. The discussions mainly concerned Bragg acquiring Grant’s shares. The three men exchanged various emails which Grant argued amounted to a completed contract for the sale of his shares. Bragg denied that there was any contract.

In his initial emails, Bragg asked Grant if he was prepared to proceed with a draft agreement drawn up by a firm of solicitors. Jenkins spoke to Grant on the phone about this draft agreement. He then responded to Bragg that Grant was not prepared to proceed with the draft agreement unless he received certain assurances and information.

Grant responded to this email disputing Jenkin’s summary of the phone conversation. Jenkins responded to Grant stating that he would only proceed to act as Grant’s agent if given positive instructions by four o’clock that day. Grant did not respond by four. Jenkins therefore terminated his agency relationship with Grant and told Grant that he would no longer proceed with the negotiations. Grant then emailed Jenkins agreeing to the draft proposal.

At trial, the judge held that the first email constituted an offer, which was accepted by the final email. Bragg appealed. He argued that:

  1. Grant had rejected the offer in the first email when he spoke to Jenkins on the telephone. It was therefore no longer capable of acceptance;
  2. If this was not the case, the offer lapsed by the time of the final email;
  3. The negotiations were ‘subject to contract’. This meant that there would be no binding relations until both parties had signed the draft agreement.
Issue(s)
  1. Had Grant rejected the offer?
  2. Had the offer lapsed?
  3. Were the negotiations subject to contract?
Decision

The court held in favour of Bragg. The negotiations were not subject to any implied ‘subject to contract’ understanding. However, while evidence on the phone call between Jenkins and Grant was scant, the court concluded that Grant had rejected the offer in the first email. His desire for assurances and information could be interpreted as a request for information (which is not a rejection). However, given the overall circumstances surrounding the negotiations and statements made by Grant in later emails, it was better construed as a rejection.

Additionally, the court interpreted Jenkin’s second email as telling Grant that he had until four o’clock to accept the offer. Since Grant did not respond in time, if the offer had been valid it would have expired at that point.

This Case is Authority For…

An offer is terminated by the offeree’s rejection. If an offer is stated to be open until a particular time, it will also be terminated when that time passes.