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The contract wasn’t signed, so I don’t have to abide by it, do I?

An unsigned contract can still be binding if the parties act in accordance with the contract, even though they did not comply with the formalities set out in the contract.  In May this year, the Court of Appeal reconfirmed that an unsigned agreement may still be binding on the parties.  In that case, the parties had entered negotiations for a legally binding short form agreement, which they called the Deal Memo, which was ultimately to be replaced by detailed long form agreements. The Deal Memo stated it was not binding unless signed by all of the parties.  One party signed the Deal Memo and the other didn’t.  The parties were performing in accordance with the Deal Memo but subsequently, negotiations for the long form agreements broke down.  One party tried to claim that the Deal Memo wasn’t binding because it hadn’t been signed.  However, the Court of Appeal found that the contract had been accepted by conduct which was only consisted with being contractually bound by the Deal Memo.

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