Pillsbury Winthrop Shaw Pittman

Attention to detail in informal oral and email contract negotiations

By Raymond L Sweigart

With the ever-increasing use of and reliance on emails and other forms of informal communication handled on a rushed basis during a hectic negotiation process, it is a common occurrence for such informal business dealings to result in agreements that are partly oral, partly written and in various forms. This, in turn, can lead to difficulties should the contractual relations break down and result in litigation. A pause for thought and attention to detail can prove to be most prudent.

An example of the foregoing is presented by a recent decision from the Court of Appeal for England and Wales, Hamid v Francis Bradshaw Partnership [2013] EWCA Civ 470. The claimant, Dr Hamid, was the director and sole owner of a limited company, Chad Furniture Store Ltd, which in turn operated a furniture business under a trading name, Moon Furniture. His status as owner of this company was a matter of public record. However, in entering into a contract regarding a new furniture showroom for his business, Dr Hamid throughout his discussions and dealings with the defendant used and signed his own name and also used the email and trading name of his business rather than its corporate name.

The defendant asserted that in entering into the contract it believed that it was dealing with the claimant’s limited company and not the claimant as an individual. The tactical reason for this defence was that if the company was joined or substituted as claimant, it could be argued that it had suffered no loss because it did not own the subject property that had been allegedly damaged by improper design and construction. The first-instance court as a preliminary issue held for the individual claimant, Dr Hamid, and the Court of Appeal had to decide whether the individual or his limited company was the contracting party…

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