The court was asked ‘whether a contract of guarantee is enforceable where contained not in a single document signed by the guarantor but in a series of documents duly authenticated by the signature of the guarantor. It is common in commercial transactions for a contract of guarantee to be contained in a single document, and it is no doubt convenient that a guarantee should be evidenced in this way. The question however which arises in this appeal is whether it must.’
Held: ‘The question whether the guarantee may be enforced is, as it seems to me, a separate question, distinct from the guarantor’s intention. It is again the distinction between identifying an obligation which is binding, not void, and the separate question whether the agreement so identified is recorded with sufficient formality to be enforceable. The latter is simply a question of objective fact which, as the learning on signature to which I next turn demonstrates, is independent of intention. It is sufficient to conclude, as I do, that neither the formality required by the Statute nor the expectation that there would be drawn up, in the ordinary course, a further and formal document, nor yet the combination of the two, demonstrates an intention not to be bound until such document is issued.’
Judges:
Rix, Tomlinson LJJ, Sir Mark Waller
Citations:
[2012] EWCA Civ 265
Links:
Statutes:
Statute of Frauds 1677 4, Law of Property (Miscellaneous Provisions) Act 1989 2
Jurisdiction:
England and Wales
Citing:
Cited – Reuss v Picksley 1866
A written proposal was purportedly accepted orally. The requirements of the 1677 Statute were satisfied where a signed written offer containing the requisite terms was accepted orally by the other party.
Willes J said: ‘The only question is, . .
Cited – In Re New Eberhardt Company, Ex parte Menzies CA 20-Nov-1889
The 1677 Statute is complied with if, per Fry LJ: ‘First, there must be at or before the date of the issue of these shares, a contract; secondly, that contract must be duly made in writing; and thirdly, that contract must be filed with the . .
Cited – Timmins v Moreland Street Property Co Ltd CA 1958
The Court considered the effect of a note or memorandum evidencing the sale of a property where it was described as ‘6,8 and 41, Boundary Street, Shoreditch (freehold).’ It was sought to connect the signature on a purchaser’s deposit cheque with an . .
Has been overruled – Law v Jones 1974
A ‘subject to contract’ document might be evidence of an antecedent or oral contract and satisfy section 40 of the Law of Property Act 1925 if the stipulation was later waived. A memorandum or note must, if it is to be effective, not only state the . .
Cited – Tiverton Estates Ltd v Wearwell Ltd CA 1975
“Subject to Contract” not to be diluted
‘subject to contract’ proposals remain in negotiation until a formal contract is executed. Lord Denning MR said: ‘for over a hundred years, the courts have held that the effect of the words ‘subject to contract’ is that the matter remains in . .
Cited – The Anemone 1987
Owners wished to let their vessel on time charter to Afram Line Limited but were unwilling to do so without a guarantee. The negotiations were conducted by Centre Shipping on behalf of owners and Dipgrove Holdings on behalf of charterers. It was . .
Appeal from – Golden Ocean Group Ltd v Salgaocar Mining Industries Pvt Ltd and Another ComC 21-Jan-2011
The defendants sought to set aside orders allowing the claimants to serve proceedings alleging repudiation of a charterparty in turn allowing a claim against the defendants under a guarantee. The defendant said the guarantee was unenforceable under . .
Cited – Actionstrength Limited v International Glass Engineering In Gl En SpA and others HL 3-Apr-2003
Actionstrength agreed with Inglen to provide construction staff to build a factory for St-Gobain. Inglen failed to pay. Actionstrength claimed against for the amount due. Inglen went into liquidation. The claim was now against St-Gobain. The claim . .
Cited – Eccles v Bryant and Pollock CA 1947
The Plaintiff contended that a letter written by the purchaser’s solicitor which effectively set out the terms of the agreement, enclosed the part of the contract signed by the purchaser, and asked in exchange for the counter-part signed by the . .
Mentioned – Elias v George Sahely and Co (Barbados) Ltd PC 1982
(Barbados) The parties entered into an oral agreement for the sale of land to the plaintiff. The plaintiff’s solicitor then wrote to the defendant’s solicitor confirming the oral agreement and setting out its terms. He enclosed a cheque for 10 . .
Cited – Von Hatzfeldt-Wildensburg v Alexander ChD 26-Jul-1911
A purchaser wrote offering to purchase a house, saying acceptance was subject to her solicitor approving title, covenants, lease and form of contract.
Held: It was not a complete contract capable of enforcement: ‘It appears to be well settled . .
Cited – Caton v Caton HL 1867
A document began by referring to ‘the under mentioned parties’ and then referred to the parties in question by name in relation to various promises. Neither party signed the document and the question was whether the document constituted a sufficient . .
Cited – The Anemone 1987
Owners wished to let their vessel on time charter to Afram Line Limited but were unwilling to do so without a guarantee. The negotiations were conducted by Centre Shipping on behalf of owners and Dipgrove Holdings on behalf of charterers. It was . .
Cited – Wilson v Secretary of State for Trade and Industry; Wilson v First County Trust Ltd (No 2) HL 10-Jul-2003
The respondent appealed against a finding that the provision which made a loan agreement completely invalid for lack of compliance with the 1974 Act was itself invalid under the Human Rights Act since it deprived the respondent lender of its . .
Lists of cited by and citing cases may be incomplete.
Contract
Updated: 31 August 2022; Ref: scu.451839