What You Do Matters

The saying that 'if it walks like a duck and quacks like a duck, it is a duck' is true in contract law also, because if you behave in accordance with a contract, the court will be inclined to come to the conclusion that the contract is operative, even if it has not been signed.

This was borne out by a decision of the Technology and Construction Court in a recent case in which a subcontractor was sued for causing delay to a building project and where the (unsigned) contract had a clause requiring that the contractor be compensated should this occur.

The subcontractor argued that there was no contract, because none had been signed, even though there had been a copious exchange of correspondence setting out terms etc. The Court concluded, however, that there had been the offer and acceptance necessary to create contractual relations and the fact that the subcontractor had commenced work was further evidence that a contract had come into being.

Aston Bond says, "It can be risky to start to fulfil a contract before you have finalised its terms. We can help you to protect your position while negotiations are ongoing and to ensure you enter into a contract with your legal risks controlled."

Partner Note
A E Yates Trenchless Solutions Ltd. v Black & Veatch Ltd. [2008] EWHC 3183 (TCC). See http://www.bailii.org/.

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