Email Disclaimers and Contract Formation: Baillie Estates Ltd v Du Pont (UK) Ltd

A recent judgment by Lord Hodge has provided a brief insight into the role of email disclaimers in the process of contract formation. 

 The case of Baillie Estates Ltd v Du Pont (UK) Ltd involved a dispute as to whether or not a contract had been concluded between the parties.  The facts will be familiar to all involved in negotiating commercial contracts:  a protracted series of emails, meetings and discussions ended in an apparent contract, with the difficulty then being to determine whether a contract was concluded and, if so, when and on what terms.

This comment does not seek to examine process of contract formation in this particular case, other than to note that Lord Hodge emphasised the accepted importance of intention and agreement, both assessed objectively (para 25).  What makes this case particularly interesting – and the lack of legal submission particularly frustrating – is the comment by Lord Hodge at para [32].  Lord Hodge notes, for completeness, that the defenders "did not advance the argument set out in their defences that their emails contained a standard disclaimer that the email did not constitute a contractual offer or acceptance unless it was designated that an e-contract was intended."

Wording along similar lines will often be found on email disclaimers, despite the fact that many senders will be unaware of it, and many recipients will fail to read it.  Nonetheless, since the parties are entitled to determine the moment of contract formation, by demonstrating when they objectively intended to conclude a contract, it is arguable that the use of an email disclaimer on these terms should be effective in preventing a contract from being concluded. 

Lord Hodge disagreed with this analysis in the present case, noting that "Such an argument would have been inconsistent with Mr Cormack's [solicitor-advocate for the defenders] approach and would have been met by the response that it was the attached proposal rather than the email which was the offer document."  (para [32]).

Although such comments are obiter, given that the point was not argued in court, they do indicate that the courts may not be prepared to accept email disclaimer wording unless it explicitly covers the facts at issue.  Reliance on general wording that the contents of the email are not contractually binding may be insufficient where draft contracts or proposal documents are appended as attachments, and the contract is arguably concluded on those terms.  Further developments are awaited with considerable interest.

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