Tuesday, February 2, 2010
When two parties are negotiating a draft agreement by e-mail, it isn’t necessarily clear when they’ve reached the stage of an enforceable contract—even when the draft document they’re circulating is drafted by counsel and has provisions for joint signatures. That’s the lesson from the recent case of Grant v. Bragg EWCA Civ 1228, reversing an earlier decision by the chancery court.
No, it wasn’t a rematch of the Battle of Chattanooga (left and right), but a falling-out of two British co-venturers in the resort business. When Bragg forced Grant out of their venture, the two wound up in negotiations under a buyout provision lf a Shareholders’ Agreement. A draft of a buyout was prepared by a firm of solicitors, and then sent back and forth between the two principals over a period of time. The agreement was never signed and the buyout never happened. Grant eventually sued, claiming a contract had been formed in the e-mail exchanges between the pair. The Chancellor ruled for Grant, and the Court of Appeal affirmed in a split decision. Solicitors Alex Carter-Silk, Nicholas Tall, and Mark Bailey offer a rundown here (free registration required).