Banter, alcohol and a bit of wishful thinking does not a contract make

legal updates

Deals can be done in the pub or indeed on the golf course or elsewhere but on this occasion, the court was not convinced.

Read our disclaimer keyboard_arrow_down

This website content is intended as a general guide to law as it applies to the motor trade. Lawgistics has taken every effort to ensure that the contents are as accurate and up to date as at the date of first publication.

The laws and opinions expressed within this website may be varied as the law develops. As such we cannot accept liability for or the consequence of, any change of law, or official guidelines since publication or any misuse of the information provided.

The opinions in this website are based upon the experience of the authors and it must be recognised that only the courts and recognised tribunals can interpret the law with authority.

Examples given within the website are based on the experience of the authors and centre upon issues that commonly give rise to disputes. Each situation in practice will be different and may comprise several points commented upon.

If you have any doubt about the correct legal position you should seek further legal advice from Lawgistics or a suitably qualified solicitor. We cannot accept liability for your failure to take professional advice where it should reasonably be sought by a prudent person.

All characters are fictitious and should not be taken as referring to any person living or dead.

Use of this website shall be considered acceptance of the terms of the disclaimer presented above.

The High Court recently had to spend considerable time deciding on a claim between Mike Ashley of Sports Direct and a former investment banker called Mr Blue.

In short, the two were drinking in a London pub with 3 others who were being courted to become Sports Direct’s new Corporate Brokers. In between the banter re the fortunes of Mr Ashley’s Newcastle United, Mr Ashley apparently told Mr Blue he would pay him £15 million if he could get Sports Direct’s share price up from £4 to £8 per share. It seems Mr Blue went home and told his wife of the deal as around a year later, Mr Blue’s wife sent him a text saying “bingo is our nameo!!!” in relation to the shares hitting the magic £8. However, Mr & Mrs Blue’s payday was not to be and so off to court they went.

After hearing arguments from some no doubt very expensive legal folk,  the court ruled that there was no binding contract. It gave 8 reasons:

1.    The setting – described as “five guys and a barman in a pub”, this ‘meeting’ had no formal agenda or structure and was predominantly a social event. Deals can be done in the pub or indeed on the golf course or elsewhere but on this occasion, the court was not convinced. 

2.    The purpose of the occasion – there was a business reason behind the meeting but it was to lure the Corporate Brokers and not to agree a personal incentive bonus with Mr Blue.

3.    The nature and tone of the conversation – while the court accepted that ‘banter’ could have a more serious intent, it was not to be in this case.

4.    Lack of commercial sense – would a businessman such as Mr Ashley seriously offer someone who would be on £250,000 a year if he worked

5 days a week, a bonus of £15 million? No said the court, Mr Ashley was merely using pub banter to display his wealth to try and attract these Corporate Brokers to Sports Direct.

5.    Incongruity with Mr Blue’s role – the court were not convinced Mr Blue alone could ‘get’ Sports Direct’s share price up to £8 in fact they doubted “that any human being had such powers”.

6.    Vagueness of the offer – no time limits were set, no period was set for the shares to stay above £8 and so no real contractual terms were agreed.

Connected Car FinanceReady to take the connected approach?

We’re here to ensure all used car dealerships deliver a better car finance experience for their customers. With over 4,000 approved dealer partners we ensure you are properly supported and connected with a range of flexible finance options, allowing you to lend and your customers to buy in complete confidence.

7.    Perceptions of the witnesses – the three perspective Corporate Brokers said they saw the conversation as no more than banter, the court agreed.

8.    Mr Blue’s perception – for a contract to be binding all parties must intend for there to be a contract. Mr Blue failed to get anything in writing from Mr Ashely in the following days and in fact never made mention of it to Mr Ashley until a year later. Not the actions of someone who truly thought they has a binding contract.

The main lesson we learn here is that although oral contracts can be binding, it is always better to get something in writing and to make all the terms clear if only to avoid the wishful thinking of others because as the judge said;  “the human capacity for wishful thinking knows few bounds”- something we witness every day here dealing with consumers who expect a brand new vehicle for their used vehicle price.   

Nona BowkisHead of Legal Services / SolicitorRead More by this author

Related Legal Updates

Service Contracts – the real cost of a bad decision

Read the terms and conditions very carefully as once signed, it is nigh on impossible to cancel the contract.

Accepting Lowball Offers 

What are your legal obligations when a customer makes a significantly low offer which you ”jokingly” accept? Will it be legally binding?

Sales on behalf of a Third Party

The Lawgistics’ stationery range includes a Sale or Return Agreement form that will be of assistance to you in such transactions. 

Who to and who not to trust

Vehicles have often been lent by trusting traders, without relevant paperwork, making the vehicle loan terms difficult to establish.

Divorcing couples and their cars

The vast majority of cases are not theft. They are civil disputes and for this reason we would initially recommend speaking to a solicitor or Citizens Advice.

Terms & Conditions

We can provide an overview of them plus tips on how to close any potential loopholes.

Rolling contracts

These are also known as auto-renewal contracts, which over the years have become very popular with service providers as a successful technique to retain customers and produce profit.

Get in touch

Complete the form to get in touch or via our details below:

Phone
01480 455500
Address

Vinpenta House
High Causeway
Whittlesey
Peterborough
PE7 1AE

By submitting this quote you agree to our Terms & Conditions and Privacy & Cookies Policy.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.