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Employment - University of Plymouth v ECL Ltd 2009 and the elements of a binding contract

Written by Michael Coyle on 10 August 2009

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The Court of Appeal became involved in a dispute concerning the provision of summer places for students. The main issue was whether or not the European Language Centre (ELC), could count on the relationship between the parties not least the exchange of e-mails and telephone calls to claim that a binding contract was in place. In addition the parties had worked together for some years now.

The Court said no and this case illustrates the problems with relying on informality to create legal relations. Always best to ensure the contract is recorded in a document signed by both parties.

The court concluded :-

"Parties to a business venture often discuss proposals at length before finally committing themselves to a contract and the fact that both sides assume that their discussions will eventually lead to a contract is not substitute for an unequivocal acceptance of terms on offer. Although an offer may be accepted by conduct, conduct that does not come to the attention of the offeror or which is equivocal will not do.

Only conduct which is unequivocal in the sense that it is consistent only with the acceptance of the offer, and which is brought to the attention of the offeror, is capable of having that effect.

In the present case there is nothing in the exchanges between the parties or the conduct of ELC that amounted to an acceptance of an offer of accommodation set out in the e-mail.

The fact that ELC began organising its programme for 2006 in the summer and autumn of 2005, even if known to the university, was not sufficient for that purpose because, to judge by previous years, it was something that it could be expected to do, whether or not a binding contract had already been concluded"

The basic principles of english law have established that 4 requirements are needed to establish contractrual relations namely:

1. Offer

2. Accetance

3. Consideration and

4. Intention to create legal relations.

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