There had been a negotiation between representatives of the British Airline Pilots Association and the airline company regarding pension rights of pilots who were made redundant. The company contended that the representation made by it in the course of negotiations was not intended to give rise to legal relations, and the plaintiff sought to enforce the (expressed to be) ex-gratia payment. The court was asked whether a contract had been made between the parties.
Held: The promise and agreement made by the airline was made in the context of a business relationship and not in a domestic or social context, and therefore, the onus would be on the party denying that legal relations were intended to show that there was no intention to create legal relations.
Megaw LJ said: ‘In the present case, the subject matter of the agreement is business relations’ not social or domestic matters. There was a meeting of minds – an intention to agree. There was admittedly, consideration for the company’s promise. I accept the proposition of counsel for the plaintiff that in a case of this nature the onus is on the party who asserts that no legal effect was intended, and the onus is a heavy one.’
The use of a phrase such as ‘without prejudice’ should normally be interpreted as meaning that the party agreeing to pay ‘does not admit any pre-existing liability on his part’
Judges:
Megaw J
Citations:
[1964] 1 All ER 494, [1964] 1 WLR 349
Jurisdiction:
England and Wales
Citing:
Cited – Rose and Frank Co v J R Crompton and Bros Ltd CA 1923
The court considered whether a contract had been brought into existence.
Held: Scrutton LJ said: ‘Now it is quite possible for parties to come to an agreement by accepting a proposal with the result that the agreement does not give rise to . .
Cited by:
Cited – Esso Petroleum Limited v Commissioners of Customs and Excise HL 10-Dec-1975
The company set up a scheme to promote their petrol sales. They distributed coins showing the heads of members of the English football team for the 1970 World Cup. One coin was given with each for gallons of petrol. The Commissioners said that the . .
Cited – Judge v Crown Leisure Ltd CA 21-Apr-2005
The claimant appealed against dismissal at the ET and EAT of his claim for constructive dismissal. The court considered whether the employer had made a promise to the employee.
Held: Smith LJ said: ‘In my view, with respect, [the claimant’s . .
Cited – Dresdner Kleinwort Ltd and Another v Attrill and Others CA 26-Apr-2013
The bank appealed against judgment against it on claims by former senior employees for contractual discretionary bonuses.
Held: The appeal failed. The bank’s unilateral promise made within the context of an existing employment relationship to . .
Lists of cited by and citing cases may be incomplete.
Contract
Updated: 10 May 2022; Ref: scu.242894