Three actresses, an all girl group called ‘Rock Bottom’ and their composer and manager developed an idea for a television series based on the group and their lives. The television company’s head of drama said she would commission a pilot script. Thames and the claimants would then decide whether to make six episodes. The plaintffs were paid to maintain the idea’s confidentiality until a decision had been made and that they would not until then appear in any competing television programme. The plaintiffs agreed that any eventual series might use different actors.This was all confirmed in a letter by Thames, providing: ‘We write to confirm the understanding between us whereby in consideration of the payment by us to you of the agreed sum of [andpound;500] we shall acquire an option on your services in connection with a possible new series of programmes . . during the period commencing from the date hereof until 31 December 1974. It is understood and agreed that . . Should Thames decide to proceed with the series you will have first refusal in connection therewith but in the event of your deciding against such a project your decision shall in no way jeopardise Thames’ right to undertake the series with three other artistes . . ‘ The time was extended, and Thames decided to make the series under the nake ‘Rock Follies’, the plaintiffs agreeing to take part under the terms of the agreement, but no firm offer of parts was ever made to them. Two series came to be made derived from the idea. The plaintiffs sued in breach of confidence and of contract.
Held: The court rejected the plaintiffs’ argument that, they having exercised their right of first refusal, Thames was not entitled to impose any additional terms in relation to other work by the claimants during the making of the series. Details of the working arrangements clearly remained to be negotiated. However, he did accept their alternative argument ‘that Thames were at this stage obliged to make the girls a contractual offer of parts, in terms not inconsistent with what had been agreed on October 4 and not less favourable than they were prepared to accept . . Mr Strauss is also right in submitting that they would have been obliged to keep such offer open for as long as was reasonable in the circumstances prevailing at the time. Inevitably time would be needed to try to agree the detailed terms of the engagements (involving no doubt some give and take on both sides if any agreement was to be reached). It was at this juncture, after the making of the contractual offer, that I think it was appropriate to settle these details, including any arrangements as to other work.’
A right of first refusal constitutes a right to receive a contractual offer on terms which the party who has granted the right of first refusal is prepared to accept, even though the detailed terms of any contract may require further negotiation and might ultimately not eventuate in a contract at all, and that the grantor of the right of first refusal is obliged to make a contractual offer, even though there is no express covenant to that effect in the term containing the right of first refusal.
As to the extent to which the making of a contractual offer requires the detailed spelling out of the terms of the offer: ‘Mr Harman contended that Thames did in fact make a contractual offer of parts to the three girls by Miss Sadler’s approach to the agents in March and by letters. He argued that a contractual offer did not require any detailed spelling out of the terms. I do not accept these contentions. In my judgment a contractual offer must contain at least the salient terms proposed, including most importantly terms as to remuneration.’
Judges:
Hirst J
Citations:
[1984] QB 44
Jurisdiction:
England and Wales
Citing:
Cited – Smith v Morgan ChD 1971
The plaintiff sold property to the defendant, covenanting not to sell a piece of adjoining land without giving the defendant: ‘the first option of purchasing . . at a price to be agreed upon provided that any such offer for sale shall only remain . .
Lists of cited by and citing cases may be incomplete.
Intellectual Property, Equity
Updated: 11 May 2022; Ref: scu.540358
