New Judgment: RTS Flexible Systems Ltd v Molkerei Alois Muller Gmbh & Company KG (UK Production)  UKSC 14
10 Wednesday Mar 2010
On appeal from:  EWCA Civ 26.
The question before the Court was whether the parties entered into a contract following the expiry of a letter of intent, and if so, the terms of the contract. In a unanimous decision, the Supreme Court held that although there was no formal contract, the parties did reach a legally binding agreement and that agreement contained wider terms than the limited ones found by the High Court at a trial of preliminary issues. It was unrealistic to suppose that the parties did not intend to create legal relations. The parties had reached essential agreement on the issues, and it was possible for an agreement ‘subject to contract’ to become legally binding if the parties later agree to waive that condition. The Court held that the parties had agreed to waive the subject to contract provision. Any other conclusion made no commercial sense.