Can a binding contract be formed by a simple email exchange?

This was a question that was recently considered by the High Court in London.

By way of background, a Senior Brand Manager at the Claimant company (Antena) emailed a Buyer with the Respondent (Superdrug) about a new product line and asked for confirmation that they would proceed with a minimum quantity order for 12 months.  The reply stated: ‘Please go ahead’.

Sales were slower than expected and, after a few months, the Respondent advised that 'orders going forward would be unlikely'.  When no further orders materialised, the Claimant sought to hold the Respondent to their minimum quantity.

The Defendant contended that the email did not give rise to an agreement in the absence of a specific purchase order being issue by them in accordance with their standard terms of business. Further, there was no intention to create legal relations and the Buyer did not have the authority to enter into a contract on their behalf.

The Court rejected these submissions noting that the parties had previously contracted for the supply of another product under a similar agreement with a minimum quantity clause. That the Defendant may have intended to deal on their own terms was considered irrelevant in the context of their Buyer’s actions. 

An expensive lesson for the Defendant: identifying the need for effective staff training - ensuring policy is put into practise!

For more information about this article, or any other aspect of our business and personal legal solutions, get in touch.  There is no charge for initial informal advices.