The UK High Court, and subsequently the Court of Appeal, have confirmed, once again, that an unsigned agreement may still bind parties. In this case, the parties entered into negotiations for a legally binding short form agreement (the ‘Deal Memo’).    The Deal Memo stated that it was not binding until signed by both parties.  The defendant signed but the claimant did not. The claimant subsequently performed all of its obligations under the Deal Memo, but the defendant later argued that it was not binding because the claimant had not signed it.  The High  Court held that the Deal Memo was binding, even in the absence of the claimant’s signature.  It was clear that the claimant had accepted the contract by conduct and this had been communicated to the defendant. The claimant’s conduct was not merely pre- contractual preparation – its acts were significant and consistent only with being contractually bound by the Deal Memo. The Court of Appeal agreed. It adopted an offer and acceptance analysis of the situation, looking at the “reasonable expectations of honest sensible businessmen”. It held that a party can waive a prescribed mode of acceptance (such as a signature) if it accepts in a different way (such as by conduct) provided that acceptance does not prejudice the other party. On the facts, the defendant had not been prejudiced.  Indeed, it had benefitted from the claimant’s performance. No real uncertainty (other than the precise date on which the contract had been made) had been caused by the absence of the claimant’s signature. The case shows that, even where a contract sets out formalities that must be complied with, it can still bind the parties if their conduct demonstrates they have waived those requirements.

Reveille Independent LLC v Anotech International UK Ltd