If you want to make sure that an offer is properly accepted to form a contract, you might want to insist it is in writing, and signed by both parties. Which is what a counter offer said in the negotiation of a deal memo for product placement in the US Master Chef TV series and for a licence to use the Master Chef brand. The deal memo was never signed by both parties but they still went ahead as if it had been. Had a contract been formed by conduct, despite the clear wording in the counter offer?
Yes, said the Court of Appeal in Reveille v Anotech. There was clear evidence of acceptance by conduct by the party that did not sign, conduct in which the other party was closely involved. In not signing, the offeree was waiving a prescribed mode of acceptance, set out for its benefit. That was effective so long as there was no prejudice to the other party.
- acceptance can be by conduct, if objectively intended to constitute acceptance;
- acceptance can be of an offer in a draft agreement drawn up between the parties but never signed;
- a party can, by clear and unequivocal words or conduct, waive the requirement of its signature and conclude the contract without it;
- an offeror can waive the requirement of a signature and acquiesce in a different method of acceptance;
- in the court's view it followed that, where the requirement of a signature is intended for the offeree's benefit, and the offeree accepts in some other way, that should be treated as effective unless it can be shown that failure to sign has prejudiced the offeror;
- a draft agreement can have contractual force, although the parties do not comply with a requirement that to be binding it must be signed, if essentially all the terms have been agreed and their subsequent conduct indicates this, although a court will not reach this conclusion lightly;
- the subsequent conduct of the parties is admissible to prove the existence of a contract, and its terms, although not as an aid to its interpretation.