Can you enter into a contract over a pint?

In a widely reported case involving the owner of Sports Direct, the High Court was asked to consider whether an informal conversation in a pub, between two businessmen, was enough to create a legal contract between them.

This particular case involved a potential multi million pound deal, but it is of wider interest as the court reiterated the well-established law in this area. 

It is perfectly legal for contracts between parties to be discussed and agreed in a pub, or in any other non-formal setting. You don't have to be sitting across the table from each other in a board room or solicitor's office to do the deal!

However, if there is ever a dispute about whether a legally binding contract was created, the court will be asked to consider whether a "reasonable observer" would think that entering into a contract was what the parties were intending. 

In the Sports Direct case, the court found that there was no intention to create a legally binding contract, in the discussions which took place in a pub.

Informal discussions of this type can also lead to disputes about what the terms of a contract were. For this reason, it is always best to record the terms of a contract in writing, so that this can be referred to later on if there is a dispute. 

At Samuels Solicitors, based in the South West of England, we have decades of experience in assisting clients dealing with disputes about contracts, and with the formalities of entering into commercial contracts in the course of business.

If you have a problem with a contract, or if you need advice before you enter into one, contact us today for a free, no obligation discussion about how we can help.