171. Charterparties agreed informally or 'subject to contract' etc.

Where there is an informal agreement between the parties which expressly requires or envisages the subsequent signing of a formal contract, the legal effect of that prior informal agreement depends on the intention of the parties. The parties to a charterparty may, therefore, have entered into a binding contract, whilst envisaging its subsequent replacement by a more formal one1; or they may show an intention to be bound only on the signing of a formal contract, the prior informal agreement being of no legal effect2.

It is common3 for negotiations to crystallise into a 'recap email' recapitulating the terms on