Joanne Properties Ltd v Moneything Capital Ltd & Anr

[2020] EWCA Civ 1541  

The issue on this appeal was whether the parties had entered into a binding contract of compromise set out in written communications passing between their respective solicitors. Both parties exchanged offers that were said to be either “subject to contract” or “without prejudice and subject to contract”. An offer was “agreed” and the solicitors said that they would “put a proposal to you to achieve the desired end”. A consent order was emailed across and comments were chased. Then a reply came that there had been no binding settlement because the negotiations had been conducted “subject to contract”.

Given that the alleged offer and acceptance were each headed “without prejudice and subject to contract” and that it was also plainly contemplated that a consent order was needed to embody the compromise, LJ Lewison concluded that:

“where negotiations are carried out ‘subject to contract’, the mere fact that the parties are of one mind is not enough. There must be a formal contract, or a clear factual basis for inferring that the parties must have intended to expunge the [‘subject to contract’] qualification. In this case there was neither.”

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