Contract law in practice. Steps and processes.

1. Practical Contract Law

2. Consequences of a contract dispute?

3. Management Time

4. Management Time

5. Stress

6. Loss of a customer

7. Loss of a customer
For ever!

8. Reputational harm

9. Reputational harm

10. And Lawyers are expensive

11. And Lawyers are expensive
Very expensive!

12. • You have a meeting with Alpha Services, a potential
supplier
• You think it is a preliminary meeting

13. • You have a meeting with Alpha Services, a potential
supplier
• You think it is a preliminary meeting
• You discuss the
services to be
supplied and the
price
• You shake hands and
leave

14. • You have a meeting with Alpha Services, a potential
supplier
• You think it is a preliminary meeting
• You discuss the
services to be
supplied and the
price
• You shake hands and
leave
• Alpha Services then e-mails you saying:
“It is great to have entered a contract with you”

15. There cannot possibly be a contract as it was only
a preliminary meeting
There cannot be a contract as we have not agreed
all the terms
The may well be a contract

18. Offer
Intention
Acceptance
Consideration

19. Back to the meeting
 At the meeting
You may have both made statements
A court might find that you have agreed certain terms

20. Back to the meeting
 At the meeting
You may have both made statements
A court might find that you have agreed certain terms
 A court might identify an offer and an acceptance

21. Back to the meeting
 At the meeting
You may have both made statements
A court might find that you have agreed certain terms
 A court might identify an offer and an acceptance
 ‘Consideration’ is a legal term for an exchange of promises
The exchange of promises might amount to
consideration

22. Back to the meeting
 At the meeting
You may have both made statements
A court might find that you have agreed certain terms
 A court might identify an offer and an acceptance
 ‘Consideration’ is a legal term for an exchange of promises
The exchange of promises might amount to
consideration
 But did you intend to be legally-bound?

23. Intention?
 In a commercial setting
There is a presumption that you intended to be legally-
bound
You will have to rebut the intention

24. Intention?
 In a commercial setting
There is a presumption that you intended to be legally-
bound
You will have to rebut the intention
 But surely you did not agree all the terms?
A court may find that you have agreed sufficient terms
for a contract to come into existence
The court may fill in the gaps

25. Intention?
 In a commercial setting
There is a presumption that you intended to be legally-
bound
You will have to rebut the intention
 Buy you did not agree all the terms?
A court may find that you have agreed sufficient terms
for a contract to come into existence
The court may fill in the gaps
So there may be a
contract
There may be
contract

26. What should you have done?
MAKE IT CLEAR THAT YOU
DO NOT INTEND TO ENTER
LEGAL RELATIONS

27. These discussions are subject to contract
We do not intend to enter a contract until we
have signed a final written agreement

28. These discussions are subject to contract
We do not intend to enter a contract until we
have signed a final written agreement

29. These discussions are subject to contract
We do not intend to enter a contract until we
have signed a final written agreement

30. These discussions are subject to contract
We do not intend to enter a contract until we
have signed a final written agreement
DRAFT
CONTRACTS
‘Subject to Contract’

31. These discussions are subject to contract
We do not intend to enter a contract until we
have signed a final written agreement

32. Another example
• Alf tells a potential buyer that
“someone else is interested” in a
machine that he is trying to sell
– This is not true
– The buyer purchases the
machine
– Alf has made a fraudulent
misrepresentation
– This could prove very costly

33. • Alf tells a potential buyer that
“someone else is interested” in a
machine that he is trying to sell
– This is not true
– The buyer purchases the
machine
– Alf has made a fraudulent
misrepresentation
– This could prove very costly
Another example
• In one recent case
• Contract value was £48m
• Liability cap was £30m
• Fraudulent
misrepresentation!
• Claim for over £700m
• Settled for £319m

34. Simple steps can prevent
problems arising
Train sales
people in the
basics
Put
simple
processes
in place

35. Simple steps can prevent
problems arising
Train sales
people in the
basics
Put
simple
processes
in place

36. About us
We have been training
lawyers and businesses
for 20 years
TRAINING

37. About us
We have been training
lawyers and businesses
for 20 years
We train lawyers and
businesses in English law
TRAINING

38. About us
We have been training
lawyers and businesses
for 20 years
We are now designing
effective e-learning on
practical contract law to
complement our face-to-
face training
We train lawyers and
businesses in English law
TRAINING

39. For more information
www.legalandcommercial.com
info@legalandcommercial.com