Too Sharp That You Cut Yourself?
Masterchef Case Confirms that Parties are Bound by an Unsigned Agreement
In Reveille Independent LLC v Anotech International (UK) Limited the claimant agreed, amongst other things, to promote the defendant’s products during three episodes of the US series of MasterChef. Detailed agreements were drafted but never signed. A dispute arose and the Commercial Court decided that a contract had been created because of the parties’ conduct and the fact that the defendant but not the claimant had signed its own summary of the key terms of the deal even though the summary said that it would only be binding if it was also signed by the claimant.
The defendant appealed the decision but its arguments were rejected. The Court of Appeal found that because the defendant had issued the deal summary to the claimant, the clause which required execution by the claimant in order for the contract to be binding had been included for the claimant’s protection. The claimant could therefore waive the requirement to execute the deal summary if there was no detriment to the defendant.
Although the claimant’s failure to sign the deal summary left the defendant unsure about whether a binding contract had been concluded, the parties were nevertheless performing the terms that had been negotiated. The defendant had supplied the claimant with over a ton of kitchenware and the claimant had placed the equipment in three episodes of U.S. Masterchef. Whatever the detriment to the defendant, both parties had taken unequivocal steps to perform the contract and the benefit to the defendant outweighed any uncertainty surrounding the legal status of the contract.
By far the best way of resolving uncertainty about the status of contracts and avoiding litigation is to ensure that all completion requirements have been dealt with. However, if completion doesn’t take place but the parties perform terms that have been negotiated then this doesn’t prevent either party from suing on the resulting contract.