Fees agreement reached over email not legally binding
The High Court held that an agreement in an email regarding fees did not create a legally binding contract, given the fact that no final engagement letter was ever signed.
A company (D) had engaged an advisory firm (C), to provide advice in relation to a potential sale of a division of D, which did not ultimately materialise. During negotiations, D emailed C seeking to confirm C’s fees for advisory services. C confirmed the fee, but the figure was never included in the final engagement letter, certain terms of which remained subject to negotiation and which was never signed. C claimed that the email confirmation of the final fee amounted to a binding contractual agreement.
The Court held that there was no binding contract in relation to the fees. Though it was possible in principle to agree binding fees before the other terms of the engagement were finalised, the judge held that there was no objective intention to create legal relations at the time of the email, and therefore no contract was made.
However, the judge found that C had a restitutionary claim as it had provided services to D without payment, and the D was unjustly enriched as a result. D was ordered to pay C a fee limited to C’s progress payment and expenses, to which it would have been contractually entitled.