- May 18, 2016
- Posted by: Josiah Hincks Solicitors
- Category: Business Law Updates
It is a surprisingly common misconception that written contracts only become effective when signatures are appended. One Court of Appeal case, involving a cookware company and the producers of a popular television cooking show, underlined that that is most certainly not the case.
The company negotiated a deal with the producers whereby it would be licensed to exhibit the show’s logo on its wares, which would also be featured and promoted during three televised episodes. Long form contracts were never drawn up, but the principle features of the agreement appeared in a memo which was signed by the company but not by the producers.
The producers launched proceedings to enforce the contract but were met by the company’s arguments that no binding agreement had been reached. The memo had stated in terms that the producers would not be bound informally and that the contract would only become enforceable on being signed. The producers’ arguments nevertheless prevailed before the High Court, which found that a valid contract had been completed.
In dismissing the company’s appeal, the Court found that the producers had, by their conduct, waived the provision that there would be no binding contract in the absence of their signature on the memo. That conduct consisted of the producers having in fact performed their obligations in the manner contemplated by the terms of the agreement.