Reveille Independent LLC v Anotech International (UK) Ltd

[2015] EWHC 726 (Comm)

The question for HHJ Mackie QC was whether a binding contract had been formed. The key part of the Contract was this:

“This Merchandising Deal Memo shall not be binding on Reveille until executed by both [the Defendant] and Reveille.”

The Judge did not consider that Reveille could prove that the Contract was signed by them. Reveille had apparently lost the original document and never sent a signed copy to Anotech. Therefore the question to be resolved was whether there had been acceptance by conduct. The Judge noted that Anotech would not be bound by the Contract until Reveille’s acceptance of it was communicated. Here, this was not a “mere formality” given that the document in question contained Anotech’s manuscript formulation of one of the key terms.

One reason for having a clause requiring that Reveille communicate acceptance by signing and returning the document was to remove the uncertainty which otherwise might arise and in fact had arisen here. For acceptance to have been validly communicated by conduct, the evidence must be clear and, when considered as a whole and in context, unequivocal.

The position of Anotech was that given the clear language in the Contract, it was difficult to see how anything done by Reveille could be seen as an unequivocal representation that the Contract had become binding. No conduct could “trump the fact” that the Contract had not been signed and returned.

It was correct to say that both parties had already taken a number of steps in anticipation of a deal being done because of time pressure generated by the start of filming. However, there was no suggestion by either party that a binding contract had been entered into as a result, despite the fact that a draft contract was then under discussion.

The first issue related to the integration of products (or product placement) supplied by Anotech into episodes of MasterChef US. Here Reveille gave detailed evidence that this was done and this was accepted by the Judge. The complaints raised in evidence during the case about the integration were not made at the time. In terms of licensing and marketing, Anotech was both given the right to use, and did/or attempted to use, Reveille’s intellectual property.

The Judge thought that it was “overwhelmingly clear” that the work envisaged by the Contract was carried out by the parties. However the Judge also cautioned that that did not of itself mean that there was acceptance by conduct, albeit it went a long way to demonstrating it.

Reveille pointed to the fact that Anotech had agreed to arrange payment of its invoices. Why would it do so, if it did not consider itself bound by the Contract? The Judge noted that the parties did preparatory work before any contract could have come into effect because they judged that terms would in time be reached. They thus recognised that at least some work might be done without the parties entering into a contract. After Anotech signed the Contract, it must, in the view of the Judge, have recognised that the deal was there or almost so. The negotiation of a long form agreement was envisaged by the Contract in question. It does not follow that negotiation of those terms (which were, as it happened, never entered into) was a step inconsistent with acceptance by conduct of the Contract.

The Judge thought that it was “significant” that Anotech acknowledged the existence of a binding commitment by agreeing to pay invoices raised on the basis of the Contract. In the view of the Judge, Reveille communicated its acceptance by conduct and Anotech recognised this when acknowledging its obligation to pay. The Judge said:

“What more powerful evidence ... could there be?”

HHJ Mackie QC concluded his judgment by noting, that as he had found that there was a contract, it was not necessary to consider alternative remedies, such as quantum meruit. He noted that in fact, it seemed inevitable that had Reveille lacked a contractual remedy, it would have succeeded on one of these alternative grounds.

Back to the previous page

Click to download PDF