Destiny 1 Ltd v Lloyds TSB Bank Plc [2011] EWCA Civ 831 (26 July 2011)

Destiny 1 Ltd v Lloyds TSB Bank Plc [2011] EWCA Civ 831 (26 July 2011)

No binding contract was formed between Destiny 1 Limited and Lloyds TSB Bank PLC for the issuance of a guarantee to Nisa because the negotiations were for a package of financial arrangements, and agreement on all elements, including refinancing of the HSBC debt, was required before any party was bound. The execution of certain documents was preparatory and did not constitute a concluded contract.

Citation
[2011] EWCA Civ 831
Parties
Claimant/appellant: Destiny 1 Limited; Defendant/respondent: Lloyds TSB Bank PLC
Jurisdiction
England and Wales
Judgment Date
26 July 2011
Procedural Posture
Civil Appeal / Appeal From High Court (queen's Bench Division) to Court of Appeal
Outcome
Appeal dismissed
Legal Topics
Formation of Contract, Intention to Create Legal Relations, Package Transactions, Consideration
Contract Law Commercial Law Formation of Contract Intention to Create Legal Relations Package Transactions Consideration

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Parties

Destiny 1 Limited

Claimant/appellant

Lloyds TSB Bank PLC

Defendant/respondent

Procedural Posture

Civil Appeal / Appeal From High Court (queen's Bench Division) to Court of Appeal

Legal Issues

  1. 1 Whether a binding contract existed between Destiny 1 Limited and Lloyds TSB Bank PLC for the issuance of a guarantee to Nisa.
  2. 2 Whether the negotiations constituted a package deal requiring agreement on all elements before any party was bound.
  3. 3 Whether the execution of certain documents (debenture, guarantee) amounted to a concluded contract.

Ratio Decidendi

No binding contract was formed between Destiny 1 Limited and Lloyds TSB Bank PLC for the issuance of a guarantee to Nisa because the negotiations were for a package of financial arrangements, and agreement on all elements, including refinancing of the HSBC debt, was required before any party was bound. The execution of certain documents was preparatory and did not constitute a concluded contract.

Court Disposition

Appeal dismissed