Beware the gentleman’s agreement

Beware the gentleman’s agreement

We’ve all made decisions under pressure, which later turn out to be poor.

In a commercial context, this may prove fatal as the court can still find that a binding contract has been created even when discussions are not recorded in writing.

We recently analysed the case of Corporate Oil and Gas Ltd v Marshall Aviation Services Ltd [2015] EWHC 3447 (Comm), [2015] All ER (D) 10 (Dec), in which the High Court upheld an informal agreement between two parties:

What was this case about?

The claimant owned a business jet aircraft (‘the aircraft’). The defendant company provided maintenance and repair services. The claimant delivered their aircraft to the defendant so that remedial works could be carried out.

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The parties met to discuss, amongst other things, a discount on the defendant’s charges. The defendant asserted that a “‘gentleman’s agreement”’ had been reached and a discount and settlement amount for the work carried out to that date was agreed between the parties. The claimant disputed this and submitted that the agreement had been subject to confirmation by the CEO.

After the meeting th

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