Unsigned terms of business

In Fladgate LLP v Harrison a solicitor sent out an engagement letter to a company director. The director was sent invoices as and when work was undertaken by the solicitor however the director then denied liability for the invoices on the basis that there was no written or oral agreement.

However Mrs Justice Lang stated that “the giving of instructions by a client to a solicitor constitutes the solicitors retainer by that client. It is not essential that the retainer is in writing. It may be oral. It may be implied by the conduct of the parties in particular cases.”

In this case the court determined that the general principles of contract law apply. Previous case law was considered and in particular the contention that, “whether there is a binding contract between the parties, and if so on what terms, depends upon what they have agreed…upon a consideration of what was communicated between them by words or conduct and whether…they intended to create legal relations and had agreed upon all the terms which they regarded or the law requires as essential for the formation of legally binding relations.”

Generally where there is a dispute over an oral retainer the clients version will prevail however this is not the case where the court finds that the clients case is contradicted by other documentary and witness evidence.

Therefore the moral of the story for agents is try to ensure that you have signed terms of business with your landlords. But where you do not you need to ensure that someone has the full details of the conversations with the landlord noted so that you can support the contention that you have an oral agreement!

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