Binding contract can be formed before the parties think negotiations are complete

Contracts are often negotiated on the basis that no contract will be effective until it has been signed. The Supreme Court has just ruled whether that provision should be held valid even where work was being done while details of the contract were being negotiated.

On the facts considered by the Supreme Court the parties had indicated by their conduct that they have waived the requirement that the contract be executed and exchanged, and accordingly the terms of the contract that had been agreed (but not signed) were held to be binding upon the parties on the particular facts of that case which related to a construction project.

For more information contact Simon Daw.

Filed: 25/03/2010 22:23:31