NO CONTRACT CONCLUDED AFTER EXPIRY OF LETTER OF INTENT

RTS Flexible Systems Ltd v Molkerei Alois Müller GmbH & Co KG [2009] EWCA Civ 26, [2009] All ER (D) 116 (Feb)

The Court of Appeal in RTS Flexible Systems Ltd v Molkerei Alois Müller GmbH & Co KG [2009] EWCA Civ 26, [2009] All ER (D) 116 (Feb) allowed an appeal from the decision of Mr Justice Christopher Clarke (on which see our June 2008 issue, pp. 9–12) and held that no contract had come into existence between the parties after the expiry of the letter of intent which had been agreed between the parties. In reaching this conclusion the Court of Appeal placed principal reliance upon the fact that the parties had agreed that the contract between them should not become effective until each party had executed a counterpart and exchanged it with the other. The parties had not executed the contract, nor had they exchanged any counterparts and so the Court of Appeal concluded that no contract had come into existence after the termination of the letter of intent.