- May 2017
"How did it come to this?"
These are words which may have gone through the mind of Hans Gross as he sat through the 6-day Trial of a claim for €13.5 million brought against him by Bruce MacInnes in the High Court. Judgment was delivered on the 27th January 2017.
The claim related to an alleged oral contract said to have been made over dinner in a Mayfair restaurant in March 2011, Mr. Gross wished to sell his successful business and Mr. MacInnes offered to assist in achieving an enhanced sale price by using his skills in that business as an experienced Investment Banker. A few days after the dinner, Mr. MacInnes sent to Mr. Gross an e-mail setting out what he alleged was an agreement “on headline terms”, which included his leaving his current employment with an investment bank to concentrate on the sale, but he did not leave his employment until July 2011.
The business was eventually sold to a purchaser introduced by Mr. MacInnes who brought the claim, claiming that there was a binding enforceable contract and the terms of remuneration had been agreed. He claimed alternatively to be paid for all his work under a “quasi contract” as otherwise Mr. Gross would be unjustly enriched. Mr. Gross said that no contract had been entered into. Mr. Justice Coulson found in favour of Mr. Gross for a number of reasons. Whilst a contract can come into existence in the circumstances of a private dinner a Court needs to scrutinise the circumstances and detail of what may or may not have been agreed. The Claimant’s e-mail had suggested that further detailed negotiations would be required before a contract was finalised. There had been no agreement about the terms of the Claimant’s remuneration for services provided. The quasi-contract claim failed as he was still employed by the Bank.
A lesson to be drawn from this is to be wary of discussions about any business transaction in informal situations and to preface any discussions, with a clear statement that the discussion is “subject to contract” and that it is not intended to create legal relations.
For further information please contact Paul Stevens by email at firstname.lastname@example.org or call 01473 255591.
This article provides only a general summary and is not intended to be comprehensive. Special legal advice should be taken in any individual situation.