In Reveille Independent LLC v Anotech International UK Ltd (2016), the Court of Appeal found a written agreement to be binding despite the lack of a signature from one of the parties. The defendant's offer had been accepted by the claimant's conduct, despite a statement on the face of the agreement that it would not be binding on the claimant until signed by both parties.

Background

Reveille Independent LLC ("Reveille") is a US television company that produced the "MasterChef" television series in the US. Anotech International (UK) Limited ("Anotech") is a distributor of cookware.

In 2011, the parties entered into negotiations regarding the licensing of Reveille's intellectual property rights to the "MasterChef US" brand to Anotech, and the integration and promotion of Anotech's cookware products into the television series. The parties negotiated a short-form document (the "Deal Memo") with the intention of replacing the Deal Memo with long-form agreements to be further negotiated. When negotiations on the long-form agreements subsequently broke down, Reveille sought to enforce the terms of the Deal Memo to recover money due and owing and damages of approximately USD 1.7 million.

The signature box within the Deal Memo stated that it would not be binding on Reveille until signed by both parties. Anotech denied that the Deal Memo had ever been entered into, as it alleged that it had signed the Deal Memo, but Reveille had not. The High Court found at first instance that Reveille had not, in fact, signed the Deal Memo.

The question for the Court of Appeal was:

In what circumstances will a contract result when a written offer document states that it is not binding until signed by the offeree and the offeree does not sign but performs in the manner contemplated by its terms (ie, accepts the offer by conduct)?

Decision

The Court of Appeal found that Reveille had accepted the terms of the Deal Memo through its conduct, based on the following:

  1. It is established law that a party can waive a prescribed mode of acceptance by accepting in a different way, provided that acceptance has not prejudiced the other party.
  2. Anotech's position had not been prejudiced as it had received all of the benefits of Reveille performing under the Deal Memo. The court rejected Anotech's argument that it was prejudiced by uncertainty about whether a contract had been formed.
  3. There was clear evidence that Reveille had accepted the Deal Memo by conduct and that Anotech knew of (and was closely involved in) that conduct. The parties' conduct after the date of acceptance was not evidence of acceptance itself, but was evidence that the parties believed that there was a binding contract in place.

Comment

This case does not create new law, but serves as a reminder that a contract does not need to be signed in order to be legally binding, as the offeree can communicate its acceptance by conduct. Nevertheless, a signed contract is always the best evidence of acceptance.