EWCA Civ 26
We reported on this case in Issue 96. Here, the parties had, (not untypically), decided to start work before the terms of their contract had been agreed but on a presumption that ultimately terms would be finalised. There was a dispute as to what, if any, those terms were. The Judge at first instance held that there was a contract, but not one which incorporated the standard MF/1 conditions. The CA disagreed.
At first instance, RTS had said that its primary case was that the correct interpretation was that the parties were working under the terms of a Letter of Intent even though the period fixed by that letter had expired. In the CA, the main (and largely new) argument put forward by RTS was that there was simply no contract concluded or if there was a contract, it incorporated the MF/1 conditions, including a cap on their liability equivalent to the price. The CA allowed RTS to make this new case on the basis that before the Judge at first instance could have decided what, if any, contract had come into existence, the Judge would have had to consider whether any contract came into existence at all. In the CA, RTS focused on Clause 48 of the MF/1 conditions which had been agreed between the parties. This stated that the contract would not become effective until each party had executed a counterpart and exchanged with the other. The contract was not executed and no counterparts were exchanged. This meant that there would need to be a full hearing as to whether or not there was any entitlement on a quantum meruit basis, for RTS to be paid.