Reveille Independent LLC v Anotech International (UK) Ltd
Court of Appeal
Citations: [2016] EWCA Civ 443.
Facts
Reveille was a company which produced TV programs. This included the US version of Gordon Ramsey’s Master Chef. They began negotiating with Anotech, a cookware company, to feature Anotech’s product on the show and allow Anotech to use the MasterChef brand.
A dispute arose between the parties as to whether a binding contract had arisen. The parties had been negotiating a long-form agreement which they never completed. A memo passed between the parties stated that Reveille would not be bound by any agreement they had not signed. However, Anotech later produced and signed a short amended agreement. After Anotech sent Reveille the short agreement, Reveille began including Anotech products in Master Chef.
Reveille argued that they had accepted the short agreement by clear and unequivocal conduct, despite not signing it. They argued that they had waived the signature provision in the memo.
Issue(s)
- Was there a binding contract between Reveille and Anotech?
Decision
The Court held in favour of Reveille. The signature requirement was for Reveille’s benefit. This meant that Reveille was entitled to waive it. By performing according to the terms of the short agreement, Reveille waived its right to sign and accepted the short agreement via conduct. This conclusion was reinforced by the fact that Anotech facilitated Reveille’s performance and acted as if there was a concluded contract.
This Case is Authority For…
If a party has a right to sign an agreement before being bound by it, they can waive this right by clear and unequivocal words or conduct. If they do so and accept the offer, they are bound by it.
An offer accepted by conduct is known as an ‘executed’ contract. This can be contrasted with an executory contract, where the offer is accepted in the normal way. Cranston J explained that the possibility of executed contracts was justified by the need for legal certainty and meeting the reasonable expectations of businesses. If both sides act as if there is a legally binding agreement, it is unrealistic to argue that there is no contract.
As such, where the requirement of a signature is for the offeree’s benefit, and they accept in some other fashion, that acceptance is binding unless the lack of signature prejudices the offeror. Cranston J explained that the lack of certainty as to whether the short agreement applied was insufficient prejudice to Anotech, given Reveille’s performance was to its benefit.
Other
The court confirmed that the parties’ subsequent conduct is admissible as evidence to prove the existence of a contract.
