Cheverney Consulting Ltd v Whitehead Mann Ltd [2007] EWHC 3130 (Ch) (07 December 2007)

Cheverney Consulting Ltd v Whitehead Mann Ltd [2007] EWHC 3130 (Ch) (07 December 2007)

The court found that, on the balance of probabilities, the parties had agreed that the side letter would take effect as part of the overall contractual arrangements, modifying the consultancy agreement to include work performed in France for the purposes of calculating stock consideration. This agreement was binding despite the absence of a signed side letter, as evidenced by the parties' conduct and mutual understanding. The entire agreement clause did not preclude the effect of the side letter in these circumstances. The defendant was therefore in breach of contract for failing to transfer the shares due under the modified agreement.

Citation
[2007] EWHC 3130 (Ch)
Parties
Claimant: Cheverney Consulting Ltd.; Defendant: Whitehead Mann Ltd.
Jurisdiction
England and Wales
Judgment Date
07 December 2007
Procedural Posture
Commercial Contract Dispute / Retrial After Court of Appeal Ordered New Trial
Outcome
Judgment for the claimant
Legal Topics
Entire Agreement Clauses, Formation of Contract, Estoppel by Convention, Interpretation of Contracts, Breach of Contract, Remedies for Breach
Contract Law Commercial Law Entire Agreement Clauses Formation of Contract Estoppel by Convention Interpretation of Contracts Breach of Contract Remedies for Breach

Case Brief

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Parties

Cheverney Consulting Ltd.

Claimant

Whitehead Mann Ltd.

Defendant

Procedural Posture

Commercial Contract Dispute / Retrial After Court of Appeal Ordered New Trial

Legal Issues

  1. 1 Whether a 'side letter' modifying a consultancy agreement was contractually binding despite not being signed
  2. 2 Whether the parties' conduct gave rise to an estoppel by convention preventing the defendant from denying the effect of the side letter
  3. 3 Whether the entire agreement clause in the consultancy agreement precluded reliance on the side letter

Ratio Decidendi

The court found that, on the balance of probabilities, the parties had agreed that the side letter would take effect as part of the overall contractual arrangements, modifying the consultancy agreement to include work performed in France for the purposes of calculating stock consideration. This agreement was binding despite the absence of a signed side letter, as evidenced by the parties' conduct and mutual understanding. The entire agreement clause did not preclude the effect of the side letter in these circumstances. The defendant was therefore in breach of contract for failing to transfer the shares due under the modified agreement.

Court Disposition

Judgment for the claimant

Orders

  • Defendant to transfer to the claimant 162,295 shares in Whitehead Mann Plc or pay damages equivalent to their value as stock consideration under the consultancy agreement as modified by the side letter.