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England and Wales High Court (Queen's Bench Division) Decisions
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Cite as:  EWHC 1807 (QB)
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QUEEN'S BENCH DIVISION
MANCHESTER DISTRICT REGISTRY
1, Bridge Street West, Manchester, M3 3FX
B e f o r e :
| Proactive Sports Management Limited
|- and -
|(1) Wayne Rooney
(2) Coleen Rooney (formerly McLoughlin)
(3) Stoneygate 48 Limited
(4) Speed 9849 Limited
Ian Mill QC & Tom Weisselberg (instructed by McCormicks) for the Claimant
Paul Chaisty QC & Mark Harper (instructed by Hill Dickinson LLP) for the Defendants
Hearing dates: 2nd, 3rd, 4th, 5th 9th, 10th, 11th, 12th, 15th, 16th, 18th, 19th & 22nd February 2010; Judgment circulated in draft: 30th June 2010.
HTML VERSION OF JUDGMENT
Crown Copyright ©
|The Initial Discussions with Proactive||30|
|The Preparation and Execution|
|of the July 2002 Agreement||36|
|The Terms of the July 2002 Agreement||51|
|The September 2002 Agreement||68|
|The December 2002 Agreement||70|
|Proactive's Preparations for its Agency Role 72|
|The Involvement of Couchman Harrington 84|
|The Meetings on 15th January 2003||100|
|The Exchanges on 16th January 2003||113|
|The Events of 17th January 2003||124|
|The Playing Contract||140|
|Mr Harrington's letter of 20th January 2003 148|
|Subsequent Exchanges and Further Drafts 160|
|The Execution of the Agreement||175|
|The Variation Agreement||193|
|The Image Rights Representation Agreement 197|
|Financial Aspects of the Contractual|
|The Subsequent Relationship Between the|
|The Sponsorship Contracts||230|
|The Manchester United Image Rights Agreement 243|
|Mrs Rooney and Speed||254|
|The Warrington Trial||266|
|The FA Disciplinary Proceedings||274|
|The Aftermath of the Disciplinary Proceedings 284|
|THE FACTUAL ISSUES||309|
|The Extent of Mr Stretford's Knowledge||334|
|The Letter of 20th January 2003||344|
|The E-Mail Exchanges of 25th and 26th January 2003 351|
|The Events of 17th January 2003||357|
|The Extent of Proactive's Knowledge|
|Prior to 17th January 2003||383|
|The Extent of the Rooney Family's Knowledge 402|
|THE EXPERT EVIDENCE||415|
|The Agent's Role||435|
|The Practical Effect of the Eight-Year Term 477|
|Breach of Contract||556|
|RESTRAINT OF TRADE||620|
|Does the Doctrine Apply?||622|
|The Legal Principles||624|
|The Application of these Principles||642|
|The Relevance of the 2002 Agreement||656|
|THE CLAIMS AGAINST SPEED||763|
|Value Added Tax||789|
|Other Invoice Issues||798|
HH Judge Hegarty QC:
"The company will represent the aforementioned client in all areas of personality management including: transfer negotiations, contract negotiations, media negotiations; including T.V., radio and press. Commercial representation for the purpose of endorsement agreements including: boots, apparel, luggage and all other product areas. Furthermore, to include personal appearance bookings."
"The Client and Mr and Mrs Rooney together jointly appointed the Company, and the Company agrees to act, as the sole and exclusive representative of the Client, and to perform the Services during the continuance of and on the terms and conditions set out in this Agreement."
"The Company undertakes and agrees with the Client that it shall at all times during the continuance of this Agreement, diligently and faithfully serve the client and, in particular, that it shall:
3.1 Use its best endeavours and work diligently to represent the Client in all areas of employment and personality management, including (but not limited to):3.1.1 transfer negotiations;3.1.2 contract negotiations;3.1.3 media (including television, radio and press) and publicity relations and negotiations3.1.4 product endorsement and merchandising negotiations;3.1.5 personal appearance, image exploitation and other promotional opportunities;3.1.6 opportunities involving the Client's Intellectual Property;
and such other tasks as the Client and Mr and Mrs Rooney may from time to time request, and as the Company shall consider prudent and in the interests of the Client from time to time."
"In consideration for the performance of the services, the Client shall pay to the company a commission calculated on the percentage of all sums payable to the Client and/or Mr and Mrs Rooney as follows:
5.4.1 2 ½ % of the gross sum payable under any contract of employment with any football club; and
5.4.2 20% of the gross sum payable under any contracts or arrangements for the promotion, endorsement or advertisement of the Client and/or any products, goods or services;
to which the Client (or Mr and Mrs Rooney on the Client's behalf) is a party."
"7.1 Subject to clause 7.2, this Agreement shall commence on the date hereof and, subject to the provisions of this clause, shall continue for eight years, unless terminated earlier in accordance with the provisions of this clause 7.
Either the Company or the Client may terminate this Agreement immediately by giving notice in writing upon the occurrence of a material breach of this Agreement by the other party which is not remedied within 14 days of a written request, or upon the bankruptcy or insolvency (as appropriate) of the other party."
In the event that the Client and/or Mr and Mrs Rooney terminate this Agreement prior to the expiry of the term set out in clause 7.1, other than in accordance with clause 7.2, the Client and/or Mr and Mrs Rooney shall forthwith pay to the Company:
A repayment of:
£25,000, if the date of termination is prior to the date of receipt by the Client and Mr and Mrs Rooney of the payment detailed in Clause 5.1.2; or
£50,000, if the date of termination falls after such date; and
A further sum payable to the Company as liquidated damages and calculated as follows;
A sum equal to £37,500 multiplied by the number of complete years of the unexpired term of this Agreement (with years to commence from the date of this Agreement and anniversaries thereof).
A sum equivalent to the Company's total costs and expenses properly incurred from the date hereof until the date of termination notice in its performance of the Services (and which details of such costs and expenses shall be properly documented by the company and supplied to the Client and Mr and Mrs Rooney so as to facilitate such payment)."
"(i) Advise upon and prepare contractual documentation relation to Wayne Rooney's proposed Image Rights Agreements with Everton FC; and
(ii) Advise upon and prepare documentation for the structuring of Wayne Rooney's Image Rights and Promotional Rights generally."
"To ensure that the completion of the Agreement is technically correct, Stoneygate should not sign the Agreement until the following jobs have been done, in this order;
(ii) Kingsbridge to confirm that (a) the Heads of Agreement and (b) the Draft Assignment document are acceptable from a UK tax prospective;
(ii) The series of documents and structures are explained clearly to Wayne Rooney and his family and they take independent legal advice;
(iii) Stoneygate 48 company matters are finalised (i.e. appointment of directors and transfer of the shares);
(iv) Representation Agreement is finalised and executed between Stoneygate 48 and Proactive;
(v) Assignment of Rights document is signed between Wayne Rooney and Stoneygate 48;
(vi) Assignment Agreement to be reviewed by Everton FC as due diligence;
(vii) Finally, Stoneygate signs Heads of Agreement with Club.
Conceivably, steps two, three, four and five could occur at one meeting.
We will then need to finalise the long-form of the contract, which hopefully should not be a problem given the goodwill and agreement under these terms by all sides.
I look forward to discussing this with you. I'll come back to you with our fee proposal later today."
"1) Have you sent KB the Heads.
2) I will discuss this with Paul.
3) I will chase KB over Directors and Shareholdings.
4 & 5) You will deliver the documentation.
6) You will send to Eversheds.
I agree with a single session with the player and family present will allow sign-off together. I will ask Paul how to arrange that.
Is that OK?"
"I enclose for your review the following documents:
(i) Variation Agreement;
(ii) Representation Agreement between Stoneygate and Proactive;
We have prepared these contracts because under the terms of your original Representation Agreement, Proactive Sports Group was to represent all activities of Wayne (i.e. his playing services and his commercial rights). Since Wayne is now to transfer his commercial rights into Stoneygate 48 Limited, we need to vary the original Agreement to reflect this and then enter into a new Representation Agreement appointing Proactive to represent Stoneygate (as the new owner of the commercial rights). The simplest way to do this is to vary the terms of the Representation Agreement and draw up a new Agreement between the company and Proactive. This does leave us with two considerations upon which I would like your instructions.
(i) This will leave Proactive in a position where you have two representation contracts. On the one hand, Proactive is appointed by Wayne Rooney personally to look after his playing career and negotiate transfers and playing contracts on his behalf. On the other hand, following the assignment of rights from Wayne into Stoneygate 48 Limited, Proactive will be appointed by Stoneygate 48 Limited to represent Wayne's commercial interests. This raises the question therefore of whether or not the commercial rights Variation Agreement should automatically terminate upon the termination for any reason of the playing service's Representation Agreement. I have discussed this with Chris and
(ii) The original Representation Agreement was expected to last for an 8 year term. As I understand matters, FIFA licensed agents can only represent a player for a maximum of 2 years in relation to his playing contract and transfer activities. Since once the Variation Agreement is entered into, the original Representation Agreement will only relate to playing contracts and transfer activity, there may be an issue regarding that fact that it is stated to be for an 8 year term. Have you previously taken advice on this point? Furthermore, even if the player contract Representation Agreement and the Image Rights Representation Agreement are to continue for an 8 year term, the length of the Agreement could possibly expose Proactive to a claim that it is trying to bind Wayne (in the case of the Player Representation Agreement) and Stoneygate 48 Limited (in the case of the image rights Representation Agreement) to a set of arrangements that could possibly be deemed to be in restraint of trade. Once again, I should be grateful if you would let me know whether you have previously taken advice on this point, as, if not, there may be some steps that we can take to minimise the risks on this front.
Of course, it will be possible to review the position when Wayne re-signs the Player Representation Agreement at the age of 18."
"(i) Proactive to address the various decisions to be made as set out in this e-mail.
(ii) Proactive, Kingsbridge and CHA to have telephone conference call to finalise company structure issues, tax points and outstanding legal issues.
(iii) Proactive, possibly in conjunction with CHA and/or Kingsbridge, to meet with player and his family to take them through the arrangements recommended. It will be ideal if the family's solicitor was also present at that meeting to ensure that they have the benefit of independent legal advice.
(iv) At the conclusion of that meeting, we can execute the following documents;
(a) Assignment Agreement
(b) Variation Agreement
(c) Representation Agreement between Stoneygate 48 Limited and Proactive
(d) The outstanding company documentation
(e) Heads of Agreement with the Club."
"Paul has got the 288A forms for his, Paul and his mum's appointment as directors. Paul asked what date he should have on them? Said I would speak to you to be guided by your thoughts, does it matter if they are appointment pre-assignment or pre-finalising the commercial deal you referred to or is it best to hold off for a while?
Depending on your thoughts we may just need to speak to/e-mail Paul so that he is aware not to submit the forms as yet if necessary."
"The issue is that - in the 8 year Agreement - Proactive is appointed to represent not only Wayne's commercial activities/image rights but also his playing contract/transfer negotiations."
"As you know we now have to ensure that the representation agreement is modified or replaced to cover the fact that Wayne is transferring his commercial rights to Stoneygate. The solution we have initially prepared involves varying the terms of the initial agreement - by deleting all references to commercial rights - and entering into a separate agreement between Stoneygate and Proactive for representation of the commercial rights. This is fine insofar as it goes but it does leave one potential loose end: The original 8 year representation agreement would be left valid but the representation would be for an 8 year term for transfer and playing contract negotiations. You will appreciate there is something of a confusing situation here: This is because under one contract Proactive is appointed to be Wayne's player agent for 2 years (in line with FIFA regulations) and under a separate contract Proactive is appointed to advise on player contract and transfer negotiations for an 8 year term. The two situations are inconsistent and it is open to doubt which contract actually governs your agreement with Wayne regarding his playing services - not to mention that the 8 year term may not be compliant with FIFA regulations.
I recall you mentioning that the 8 year representation contract should not contain the right to represent the player's playing contract/transfer negotiations. It might be neater all round, therefore, if we simply revoked the original 8 year player representation contract/transfer representation to be governed by the standard 2 year contract. We could then enter into the new Representation Agreement between Stoneygate and Proactive for the commercial rights.
I would appreciate your instructions on this point before I finalise the representation and variation agreements."
"I would also like to confirm your instructions from our phone call on Friday that Proactive wishes to enter into the 8 year commercial rights representation agreement on the basis that the commercial rights representation agreement will not automatically terminate upon termination of the player agency contract. You will recall that I advised you that in the unlikely event of a falling out with the player - i.e. if the player agency contract is terminated/not renewed and Proactive continues to represent Stoneygate's commercial rights against the wishes of the player - then Proactive could face an action for restraint of trade, given the length of the term of the agreement and the relative commercial sophistication of the parties. I confirm your instructions that you are prepared to live with this risk and that we are to include contractual clauses in the representation agreement to attempt to minimise the risk. I would draw your attention to the fact that if the player wishes to break his contract by claiming restraint of trade in the future (however unlikely that seems at present), then such contractual wording is not by any means a guarantee that the restraint of trade will fail - at best it will give us arguments that may be used to support our position."
"As discussed yesterday, I'd be grateful if you could speak to Paul and let me know how Proactive want to deal with the Representation Agreement issue (which was set out in my fax to Paul on Monday)."
"The variation agreement only splits out the player's commercial rights, so that he as an individual may assign them to his company and not to us, as is the case currently. If Stoneygate wishes to charge PSM for the appointment to those rights it could, thereby being a commercial transaction not a representation one. (almost an advance against earnings) what do you think?
Otherwise the payment terms stay as now, and relate only to his representation rights."
"The termination and exit clauses will now operate on two levels, (1) PSM as his football representative (2) PSM as the commercial agents to Stoneygate, in the commercial agreement, I think we should beef up clause 7.2, can we mandate a re-sign at 18? I will ask Dan."
"Clause 6.3 sets out that any services beyond our normal will be paid for by the client, legal and financial will come into that category. To be fair we should change that to include getting the client to agree the charges up front, or at least the need for them, i.e. if WR needs to sue a paper he could do it from his company."
"Image Rights means the right for any commercial or promotional purpose to use the Player's name, nickname, slogan and signatures developed from time to time, image, likeness, voice, logos, get-ups, initials, team or squad number (as may be allocated to the Player from time to time), reputation, video or film portrayal, biographical information, graphical representation, electronic, animated or computer-generated representation and/or any other representation and/or right of association and/or any other right or quasi-right anywhere in the World of the Player in relation to his name, reputation, image, promotional services, and/or his performances together with the right to apply for registration of any such rights."
"3.1 Use its best endeavours and work diligently to represent the Client in the following areas of employment and personality management:3.1.1 transfer negotiations;3.1.2 contract negotiations relating solely to the Client's employment or engagement as a player (and excluding, without limitation, those relating to the media, public relations, product endorsement, merchandising, personal appearances, image exploitation and other promotional opportunities);
and such other tasks as the Client and Mr and Mrs Rooney may from time to time request and as the Company should consider prudent and in the interests of the Client from time to time;"
"The Company undertakes and agrees with the Client that it shall at all times during the continuance of this Agreement, diligently and faithfully serve the Client and, in particular that it shall:
3.1 Use its best endeavours and work diligently to represent the Client in all areas of image rights exploitation, licensing and personality management including (but not limited to):
3.1.1 media (including television, radio, press and internet) and publicity relations and negotiations;3.1.2 product endorsement and merchandising negotiations;3.1.3 personal appearance, image exploitation and other promotional opportunities;3.1.4 opportunities involving the Client's Intellectual Property;3.1.5 contract negotiations in relation to the foregoing.and such other tasks as the Client may from time to time request, and as the Company shall consider prudent and in the interests of the Client from time to time.3.2 keep full accounts and records showing clearly all transactions relating to the Client;3.3 when engaged in the negotiations listed in Clause 3.1 above, make proper efforts to negotiate contracts strictly and only in accordance with any instructions or directions given to it by the Client (whether generally or specifically in any instance or circumstance) and, in particular (but not by way of limitation), not negotiate or enter into contracts at prices or on payment terms other than those agreed by the Client;3.4 in connection with the performance of the Services, whether directly or indirectly, clearly indicate that it is acting as representative of the Client;3.5 not incur any liability on behalf of the Client;3.6 accompany representatives of the Client to promotional events, meetings, negotiation sessions and any other occasions as the Client may from time to time reasonably request;3.7 without prejudice to any other provisions, communicate to the Client all the necessary information available to it regarding the Client and the Player, and supply to the Client copies of all correspondence with business contacts and potential business contacts in such cases as the Client requests; and3.8 assist and advise the Client generally in respect of such of its business interests as it may request from time to time (and which shall, where necessary, include the referral of the Client by the Company to relevant experts and/or professional advisors)."
"…a commission calculated on a percentage of all sums payable to the Client as follows:
20% of the gross sum payable under any contract or arrangements for the promotion, endorsement or advertisement of the Client and/or the exploitation of the Intellectual Property and/or any products, goods or services to which the Client is a party."
"The Company shall be responsible for its normal and reasonable expenses incurred in performing the Services. If the Client requests that the Company performs services that are beyond the scope of the Services that the Company would provide in normal circumstances and where the Company incurs extra or unforeseeable expenses in providing such Services, the Client shall reimburse the Company in respect of those expenses (provided the need to incur such expenses is agreed in advance by the Company). Non-exhaustive illustrations of such expenses would include company administration and company secretarial services provided on behalf of the Company, and legal, financial, accounting and management services performed on behalf of the Company."
"7. Duration and Termination
7.1 Subject to Clause 7.2, this Agreement shall commence on the date hereof and, subject to the provisions of this clause, shall continue for eight years, unless terminated earlier in accordance with the provisions of this clause 7.
7.2 Either the Company or the Client may terminate this Agreement immediately by giving notice in writing upon the occurrence of a material breach of this Agreement by the other party which is not remedied within 28 days of a written request, or upon the bankruptcy or insolvency (or appropriate) of the other party.
8. Consequences of Termination
8.1 In the event that the Client terminates this Agreement prior to the expiry of the term set out in clause 7.1, other than in accordance with clause 7.2, the Client and/or the Player shall forthwith pay to the Company
8.1.2 a further sum payable to the Company as liquidated damages calculated as follows
a sum equal to £37,500 multiplied by the number of complete years of the unexpired term of this Agreement (with years to commence from the date of this Agreement and anniversaries thereof).
8.1.3 a sum equivalent to the Company's total costs and expenses properly incurred in relation to its performance of the Services from the date hereof until the date of termination notice (and which details of such costs and expenses shall be properly documented by the Company and supplied to the Client and/or the Player so as to facilitate payment)."
"The Client and the Player hereby confirm that in reviewing this Agreement prior to execution and deciding to enter into this Agreement, they have sought, taken and understood independent legal advice and hereby confirm that the terms and conditions hereof, including without limitation the Term and financial provisions of the Company's appointment hereunder are reasonable."
"The Authorised Representative is the Author's management company and shall represent the interests of the Lender and the Author in respect of this Agreement. The Lender has empowered the Authorised Representatives to act on its behalf in all matters arising under this Agreement (including without limitation in respect of matters to be mutually agreed or approved by the Lender) unless the Lender notifies the Publishers in writing otherwise."
"Whereas: the Publisher is the publisher of, inter alia, the celebrity magazine OK! ("the Magazine") and now wishes to publish a series of exclusive interviews and photographs in the Magazine ("the Features") concerning Coleen Rooney ("the Interviewee") and a weekly column to be published in the Magazine, the content of which is to be provided by the Company who is entitled to the exclusive services of the Interviewee. The Representative exclusively represents the Interviewee."
"It is, I believe, a difficult situation for me as both founder of our group and a director of Speed, however, I have to point out a fee is paid by the clients for the professional preparation and management of the accounts and I don't believe they are receiving the service any of us would wish to provide."
He continued by identifying a number of specific topics which needed to be considered by way of a meeting with Mr Page and, it would seem, Nita Patel.
"I had never seen the Couchman Harrington file myself and have only now seen it in connection with these proceedings and the proceedings recently brought against me."
"I can confirm I discussed the Couchman Harrington file and its contents on numerous occasions with Mr Rodford prior to Mr Diaz-Rainey's conversation with him. The reason for doing this was that, although the Couchman Harrington file was not an issue that had been raised by the FA (nor had the file been requested), it was, however, possible that a request for it would be made in the future. As it was it was not requested by the FA until after they had closed their case."
"For the avoidance of doubt PSM will be entitled to receive commission at the rate set out in paragraph (a) and (b) above in relation to all Playing Contracts or Commercial Rights Contracts entered into during the Term regardless of whether sums are received by the Player during or after the Term hereof."
"16. Before discussing in greater detail the reasoning of the Court of Appeal, the Board will make some general observations about the process of implication. The court has no power to improve upon the instrument which it is called upon to construe, whether it be a contract, a statute or articles of association. It cannot introduce terms to make it fairer or more reasonable. It is concerned only to discover what the instrument means. However, that meaning is not necessarily or always what the authors or parties to the document would have intended. It is the meaning which the instrument would convey to a reasonable person having all the background knowledge which would reasonably be available to the audience to whom the instrument is addressed: see Investors Compensation Scheme Limited -v- West Bromwich Building Society  1 WLR 896, 912-913. It is this objective meaning which is conventionally called the intention of the parties, or the intention of Parliament, or the intention of whatever person or body was or is deemed to have been the author of the instrument.
17. The question of implication arises when the instrument does not expressly provide for what is to happen when some event occurs. The most usual inference in such a case is that nothing is to happen. If the parties had intended something to happen, the instrument would have said so. Otherwise, the express provisions of the instrument are to continue to operate undisturbed. If the event has caused loss to one or other of the parties, the loss lies where it falls.
18. In some cases, however, the reasonable addressee would understand the instrument to mean something else. He would consider that the only meaning consistent with the other provisions of the instrument, read against the relevant background, is that something is to happen. The event in question is to affect the rights of the parties. The instrument may not have expressly said so, but this is what it must mean. In such a case, it is said that the court implies a term as to what will happen if the event in question occurs. But the implication of the term is not an addition to the instrument. It only spells out what the instrument means.
21. It follows that in every case in which it is said that some provision ought to be implied in an instrument, the question of the court is whether such a provision would spell out in express words what the instrument, read against the relevant background, would reasonably be understood to mean. It will be noticed from Lord Pearson's speech that this question can be re-formulated in various ways which a court may find helpful in providing an answer - the implied term must "go without saying", it must be "necessary to give business efficacy to the contract" and so on - but these are not in the Board's opinion to be treated as different or additional tests. There is only one question: is that what the instrument, read as a whole against the relevant background, would reasonably be understood to mean?"
"In consideration of the performance of the Services, the Client shall pay to the company the sum of £1 (receipt of which the Company hereby acknowledges) and a commission calculated on a percentage of all sums payable to the Client as follows: 20% of the gross sum payable under any contract or arrangements for the promotion, endorsement or advertisement of the Client and/or the exploitation of the Intellectual Property and/or any products, goods or services to which the Client is a party."
"Although both parties are discharged from further performance of the contract, rights are not divested or discharged which have already been unconditionally acquired. Rights and obligations which arise from the partial execution of the contract and causes of action which have accrued from its breach alike continue unaffected."
"In a case which turns, as this one does, upon the construction to be given to a written document, a court called upon to construe the document in the absence of any claim for rectification cannot be bound by any concession made by any of the parties as to what its language means. This is so even in the court before which the concession is made; a fortiori in the court to which an appeal from the judgment of that court is brought. The reason is that the construction of a written document is a question of law. It is for the judge to decide for himself what the law is, not to accept it from any or even all the parties to the suit; having so decided it is his duty to apply it to the facts of the cases. He would be acting contrary to his judicial oath if he were to determine the case by applying what the parties conceived to be the law, if in his own opinion it was erroneous."
"A commission agent, when his agency is terminated, is not in general entitled to a declaration or an account for the future. He is only entitled to compensation to be assessed. Mathew J. called it, 4 Com. Cas. 213, 214, 215, an award of damages. In cases such as the present (when the defendants repudiated any obligation to pay) damages is undoubtedly the right description. But it may not always be the right description. Quite often there may be no repudiation but only a difference as to the amount of commission. In such cases it would not be damages as such, but an award by way of restitution. Whatever it is called, however, the right remedy is compensation in a money sum, and not a declaration".
"The issue was debated by the parties in terms of Roberts, as to which see above. In that context, I would have thought that the claim was not in debt, but essentially in restitution. It was regarded by Lord Denning as there a claim in damages solely because the principal had refused to pay, albeit in such circumstances he said that "damages is undoubtedly the right description" (at 596A). The same could I suppose be said to apply here. The case is not discussed in Goff & Jones, the Law of Restitution, 6th ed, 2002".
"In a contract with a relatively short notice period entitling either party to bring the contract to an end, it may well be possible to construe the agreement to pay commission as consideration mainly for the introduction of a client and, for that reason, to imply a term that repeat orders from a client so introduced should continue to attract commission after termination. That is, I consider, the rationale of Roberts -v- Elwell in which either side was entitled to terminate the contract by giving 3 months' notice to the other and this court held that commission was payable on repeat orders for the same goods after such a notice had been given. There was of course no express term to that effect but, in the circumstances, such an implication was necessary to be fair to the agent."
"Neil liked our liquidated damages concept with the level of damages to decrease over the term of the contract. Please see my drafting - do you think it works?"
"…common (or mutual) mistake was a common mistaken assumption of fact which rendered the service that would be provided if the contract were performed in accordance with its terms essentially different from the performance that the parties contemplated, with the result that the contract was not merely liable to be set aside but was void at common law; that the avoidance of a contract on the ground of common mistake resulted not from an implied term but from a rule of law under which, if it transpired that one or both of the parties had agreed to do something which it was impossible to perform, no obligation arose out of that agreement; that the test for common mistake was narrow, and if a contract were to be avoided for common mistake there had to be a common assumption as to the existence of a state of affairs, no warranty by either party that that state of affairs existed and the non-existence of the state of affairs had not to be attributable to the fault of either party; and that, where it was possible to perform the letter of the contract but it was alleged that there was a common mistake in relation to a fundamental assumption which rendered performance of the essence of the obligation impossible, it was necessary to construe the contract in the light of all the material circumstances in order to determine whether the contract could be avoided for common mistake."
"Every member of the community is entitled to carry on any trade or business he chooses and in such manner as he thinks most desirable in his own interests, so long as he does nothing unlawful; with the consequence that any contract which interferes with the free exercise of his trade or business, by restricting him in the work he may do for others, or the arrangements which he may make with others, is a contract in restraint of trade. It is invalid unless it is reasonable as between the parties and not injurious to the public interest."
"These are helpful expositions, provided they are used rationally and not too literally. Thus, if A made a contract under which he willingly agreed to serve B on reasonable terms for a few years and to give his whole working time to B, it would be surprising indeed if it were sought to describe the contract as being in restraint of trade. In fact such contract would very likely be for the advancement of trade. Yet counsel for Harper's did not shrink from the assertion that every contract of personal service is a contract in restraint of trade. I cannot think that either authority or logic requires acceptance of so extreme a view."
"I doubt whether this last sentence is quite accurate. It would seem to mean that every contract by which a man (or a company) agrees to sell his whole output (or even half of it) for any future period to the other party to the contract is a contract in restraint of trade because it restricts his liberty to sell as he pleases, and is therefore unenforceable unless his agreement can be justified as being reasonable. There must have been many ordinary commercial contracts of that kind in the past but no-one has ever suggested that they were in restraint of trade. But McEllistrim's case at least establishes that there comes a point at which such a contract can come within the doctrine of restraint of trade."
In a subsequent passage at pages 298-299, however, Lord Reid declined to make any attempt to define the dividing line between contracts which were and contracts which were not in restraint of trade.
"There might be thought to be some risk of proceedings being taken in certain cases of a nuisance character where the restraint of trade is readily justifiable on the basis of long-established practice in a particular sphere, such as the brewery cases upon which the appellants rely, but I cannot see any practical way of hedging about the right of a party to a contract to attack it on the ground that it has been entered into in unreasonable restraint of trade. After all, a man who freely enters into a bargain will, normally, expect to be held bound by it, and I do not anticipate a spate of litigation in which contracts of, say, "sole agency" will be assailed. In the case of agreements between commercial companies for regulating their trade relations the parties are usually the best judges of what is reasonable. In such a case, as Lord Haldane said in North Western Salt Co Limited -v- Electrolytic Alkali Co Ltd, the law 'still looks carefully to the interest to the public, but it regards the parties as the best judges of what is reasonable as between themselves.'"
"But so wide a power of potential investigation would allow to would-be recalcitrants a wide field of chicanery and delaying tactics in the courts. Where, then, should one draw the line?"
"Finally, there is the important question whether this was a mere agreement for the promotion of trade and not an agreement in restraint of it.
Somewhere there must be a line between those contracts which are in restraint of trade and whose reasonableness can, therefore, be considered by the courts and those contracts which merely regulate the normal commercial relations between the parties and are, therefore, free from doctrine."
"The doctrine does not apply to ordinary commercial contracts for the regulation and promotion of trade during the existence of the contract, provided that any prevention of work outside the contract, viewed as a whole, is directed towards the absorption of the parties' services and not their sterilization. Sole agencies are a normal and necessary incident of commerce and those who desire the benefits of a sole agency must deny themselves the opportunities of other agencies. So, too, in the case of a film-star who may tie herself to a company in order to obtain from them the benefits of stardom (Gaumont-British Picture Corporation Limited -v- Alexander). See, too, Warner Brothers Pictures Incorporated -v- Nelson. And partners habitually fetter themselves to one another.
When a contract only ties the parties during the continuance of the contract, and the negative ties are only those which are incidental and normal to the positive commercial arrangements at which the contract aims, even though those ties exclude all dealings with others, there is no restraint of trade within the meaning of the doctrine and no question of reasonableness arises. If, however, the contract ties the trading activities of either party after its determination, it is a restraint of trade, and the question of reasonableness arises. So, to, if during the contract one of the parties is too unilaterally fettered so that the contract loses its character of a contract for the regulation and promotion of trade and acquires the predominant character of a contract in restraint of trade. In that case the rationale of Young -v- Timmins comes into play and the question of whether it is reasonable arises."
"This does not mean that the question whether a given agreement is in restraint of trade, in either sense of these words, is nothing more than a question of fact to be individually decided in each case. It is not to be supposed, or encouraged, that a bare allegation that a contract limits a trader's freedom of action exposes a party suing on it to the burden of justification. There will always be certain general categories of contracts as to which it can be said, with some degree of certainty, that the "doctrine" does or does not apply to them. Positively, there are likely to be certain sensitive areas as to which the law will require in every case the test of reasonableness to be passed: such an area has long been and still is that of contracts between employer and employee as regards the period after the employment has ceased. Negatively, and it is this that concerns us here, there will be types of contract as to which the law should be prepared to say with some confidence that they do not enter into the field of restraint of trade at all.
How, then, can such contracts be defined or at least identified? No exhaustive test can be stated - probably no precise non-exhaustive test. But the development of the law does seem to show that judges have been able to dispense from the necessity of justification under a public policy test of reasonableness such contracts, or provisions of contracts as, under contemporary conditions may be found to have passed into the accepted and normal currency of commercial or contractual or conveyancing relations. That such contracts have done so may be taken to show with at least strong prima (facie) force that, moulded under the pressures of negotiation, competition and public opinion, they have assumed a form which satisfies the test of public policy as understood by the courts at the time, or, regarding the matter from the point of view of the trade, that the trade in question has assumed such a form that for its health or expansion it requires a degree of regulation. Absolute exemption for restriction or regulation is never obtained: circumstances, social or economic, may have altered, since they obtained acceptance, in such a way as to call for a fresh examination: there may be some exorbitance or special feature in the individual contract which takes it out of the accepted category: but the court must be persuaded of this before it calls upon the relevant party to justify a contract of this kind."
"Where two experienced traders are bargaining on equal terms and one has agreed to a restraint for reasons which seem good to him the court is in grave danger of stultifying itself if it says that it knows that trader's interest better than he does himself. But there may well be cases where, although the party to be restrained has deliberately accepted the main terms of the contract, he has been at a disadvantage as regards other terms: for example where a set of conditions has been incorporated which has not been the subject of negotiation - there the court may have greater freedom to hold them unreasonable."
"The law recognises that if business contracts are fairly made by parties who are on equal terms such parties should know their business best. If there has been no irregularity, the law does not mend or amend contracts merely for the relief of those for whom things have not turned out well."
"Any contract by which a person engages to give his exclusive services to another for a period necessarily involves extensive restriction during that period of the common law right to exercise any lawful activity he chooses in such manner as he thinks best. Normally the doctrine of restraint of trade has no application to such restrictions: they require no justification. But if contractual restrictions appear to be unnecessary or to be reasonably capable of enforcement in an oppressive manner, then they must be justified before they can be enforced."
"Because this can be classified as a contract in restraint of trade the restrictions that the respondent accepted fell within one of those limited categories of contractual promises in respect of which the courts still retain the power to relieve the promisor of his legal duty to fulfil them. In order to determine whether this case is one in which that power ought to be exercised, what your Lordships have in fact been doing has been to assess the relative bargaining power of the publisher and the song writer at the time the contract was made and to decide whether the publisher had used his superior bargaining power to exact from the song writer promises that were unfairly onerous to him. Your Lordships have not been concerned to enquire whether the public have in fact been deprived of the fruit of the song writer's talents by reason of the restrictions, nor to assess the likelihood that they would be so deprived in the future if the contract were permitted to run its full course."
"It is, in my view, salutary to acknowledge that in refusing to enforce provisions of a contract whereby one party agrees for the benefit of the other party to exploit or to refrain from exploiting his own earning power, the public policy which the court is implementing is not some 19th-century economic theory about the benefit to the general public of freedom of trade, but the protection of those whose bargaining power is weak against being forced by those whose bargaining power is stronger to enter into bargains that are unconscionable. Under the influence of Bentham and of laissez-faire the courts in the 19th-century abandoned the practice of applying public policy against unconscionable bargains to contracts generally, as they had formerly done to any contract considered to be usurious; but the policy survived in its application to penalty clauses and to relief against forfeiture and also to the special category of contracts in restraint of trade. If one looks at the reasoning of 19th-century judges in cases about contracts in restraint of trade one finds lip service paid to current economic theories, but if one looks at what they said in the light of what they did, one finds that they struck down a bargain if they thought it was unconscionable as between the parties to it and upheld it if they thought that it was not.
So I would hold that the question to be answered as respects a contract in restraint of trade of the kind with which this appeal is concerned is: "Was the bargain fair?" The test of fairness is, no doubt, whether the restrictions are both reasonably necessary for the protection of the legitimate interests of the promisee and commensurate with the benefits secured to the promisor under the contract. For the purpose of this test all the provisions of the contract must be taken into consideration."
"On principle it would seem to me that, faced with an agreement which was intended by the parties to be binding, the validity and enforceability of which has not been subsequently challenged, and which is not of such a nature that the Court might on its own initiative decide not to recognise or enforce it, the Court has no choice but to proceed on the basis that the agreement is binding and enforceable - as the parties themselves did in this case when they renegotiated its terms in 1988 and again in 1990."
"The Client and the Player hereby confirm that in reviewing this Agreement prior to execution and deciding to enter into this Agreement, they have sought, taken and understood independent legal advice and hereby confirm that the terms and conditions hereof, including without limitation the Term and financial provisions of the Company's appointment hereunder are reasonable."
"Many estoppels by convention have been founded on the recitals or non-operative words of an instrument recording a transaction, and in such cases the estoppel arises simply because the true construction of the instrument leads to the conclusion that the parties have agreed to assume the facts as the conventional basis upon which they have founded their contractual obligations. In such cases, the estoppel may arise without any mistake or misleading of a representee, as the true facts are known to both parties, and yet, having agreed to accept the truth of the assumption as the basis of their contract, they cannot subsequently be allowed to recede from that position. It is submitted that, in such cases, the estoppel binds by implied mutual contractual undertaking."
"There is no reason in principle why parties to a contract should not agree that a certain state of affairs should form the basis for the transaction, whether it be the case or not. For example, it may be desirable to settle the disagreement as to an existing state of affairs in order to establish a clear basis for the contract itself and its subsequent performance. Where parties express an agreement of that kind in a contractual document neither can subsequently deny the existence of the facts and matters upon which they have agreed, at least so far as concerns those aspects of their relationship to which the agreement was directed. The contract itself gives rise to an estoppel: see Colchester Borough Council -v- Smith  Ch. 448, affirmed on appeal  Ch 421."
"A well established restriction on the ability of the parties to a convention to create a parallel factual or legal universe governing their relationship by assenting to and acting upon the convention, is that one party may not deprive the other, by reliance on such a convention, of protection afforded to the latter by law as a matter of public policy."
"But there is another point, which involves considerations of some general importance, and it is this: Mr Higgins was secretary of the Deep Sea Fishery Company, the holders of the bill, and he was also secretary of Fenwick, Stobart & Co., the drawers and endorsees of the bill. In the former character he knew that the bill was dishonoured. Was that fact notice of dishonour to himself as secretary of Fenwick, Stobart & Co.? In other words, is it true as a general proposition that a fact which comes to the knowledge of a man as secretary of one company is notice to him as secretary of the other company from the mere existence of the common relationship? In my opinion it is not."
"I think that the true test is this: Where a man holds a double character, it is not necessary that he should write a letter from himself in one character to himself to inform himself in another character. What the Court has to see is whether the information he gets, as secretary of the one company, comes to him under such circumstances as that it is his duty to communicate it to the other company. Suppose, for instance, as secretary of the first company he learns something which it would be a breach of his duty to that company to communicate to the other company. I should say certainly that is not notice to the other company. It depends upon the circumstances relating to the particular case."
"It may emerge at a trial that the facts are not as alleged in the statement of claim, but if the allegations in the statement of claim are made good, the directors of the plaintiff company must then have known that the transaction was an illegal transaction.
But in my view such knowledge should not be imputed to the company, for the essence of the arrangement was to deprive the company improperly of a large part of its assets. As I have said, the company was a victim of the conspiracy. I think it would be irrational to treat the directors, who were allegedly parties to the conspiracy, notionally as having transmitted this knowledge to the company; and indeed it is a well-recognised exception from general rule that a principal is affected by notice received by its agent that, if the agent is acting in fraud of his principal and the matter of which he has notice is relevant to the fraud, that knowledge is not to be imputed to the principal.
So in my opinion the plaintiff company should not be regarded as a party to the conspiracy, on the ground of lack of the necessary guilty knowledge."
"Knowledge is not attributed to the principal where it is acquired by an agent who is defrauding the principal in the same transaction."
"And where the agent is subject to a fiduciary duty to another not to disclose information, knowledge cannot be imputed."
"In my judgment there is nothing in these facts to render it unjust to the plaintiffs or unconscionable for the defendant to assert the unenforceability of the two agreements on grounds of restraint of trade. Accordingly in my judgment the plaintiffs fail on the question of waiver, laches or estoppel or however else it may be termed."
"In this court, Mr Carr seeks to put the point more widely. He submits that it is enough for the plaintiffs if, after the point had been raised by the group's solicitors and the defendant was therefore aware of it, the group had 'affirmed' the agreements, that is treated them as still in operation. As to that, the judge said at one point in his judgment that 'after the original complaint there was nothing amounting to an affirmation of the contract'. I think he must have meant that in the context of the way the point was being put to him by counsel, viz that it would be unjust or inconceivable to allow the Defendant to take the point.
In my judgment, if there is to be a defence on these general lines, whether it be termed waiver, or laches or estoppel or whatever, to a claim that a contract is unenforceable because it is in unreasonable restraint of trade, it must be a defence on equitable grounds in the light of all the circumstances of the case - not a defence by mere rule of thumb that the point was not finally and irrevocably insisted on at the earliest possible moment. I would for my part (as did Nicholls J in the not wholly dissimilar case of John -v- James  FSR 397) take the law as formulated by Lord Selborne LC in Lindsey Petroleum Co -v- Hurd (1874) LR 5 PC 221 at 229 as follows:
"Now the doctrine of laches in Courts of Equity is not an arbitrary or a technical doctrine. Where it would be practically unjust to give a remedy, either because the party has, by his conduct, done that which might fairly be regarded as equivalent to a waiver of it, or where by his conduct and neglect he has, though perhaps not waiving that remedy, yet put the other party in a situation in which it would not be reasonable to place him if the remedy were afterwards to be asserted, in either of these cases, lapse of time and delay are most material. But in every case, if an argument against relief, which otherwise would be just, is founded upon mere delay, that delay of course not amounting to a bar by any statute of limitations, the validity of that defence must be tried upon principles substantially equitable. Two circumstances, always important in such cases, are the length of the delay and the nature of the acts done during the interval, which might affect either party and cause a balance of justice or injustice in taking the one course or the other, so far as relates to the remedy."
I would refer also, as did Nicholls J. to the comment of Lord Blackburn in Erlanger -v- New Sombrero Phosphate Co  3 AC 1218 at 1279 that:
"I have looked in vain for any authority which gives a more distinct and definite rule than this; and I think, from the nature of the inquiry, it must always be a question of more or less, depending on the degree of diligence which might reasonably be required, and the degree of change which has occurred, whether the balance of justice or injustice is in favour of granting the remedy or withholding it."
"Thus, as I read the judgment of Dillon LJ in Holly Johnson, where equitable defences of the nature of waiver, laches or estoppel are relied upon as defences to a restraint of trade claim, the court will examine all the circumstances of the case in order to determine whether it would be unjust or unconscionable to allow the claim to be made: the mere fact that the claim is not made at 'the earliest possible moment' will not suffice to establish injustice or unconscionableness for this purpose. In the event, on the facts in Holly Johnson the defence of 'waiver' failed because in all the circumstances of that case there was nothing unjust or unconscionable in allowing the artist to allege restraint of trade.
I have not overlooked the fact that Dillon LJ prefaced his observations about the defence of 'waiver' by saying 'if there is to be a defence on these general lines…'. In context, however, it seems to me that what Dillon LJ was saying was that if a defence along these general lines is raised, in considering it the court will have regard to all the circumstances of the case: I do not understand him to be suggesting that such a defence may not be available under any circumstances, as a matter of law. Had he taken that view, it would not have been necessary for him to go on to consider the particular facts of the case or to reach the conclusion that there was no representation by the artist to the effect that he had decided not to proceed with the claim of restraint of trade.
Moreover, it seems clear that the term 'waiver' as used to describe the defence which the record company was putting forward in Holly Johnson connoted waiver in a general equitable sense (thus Dillon LJ: '…whether it be termed waiver, or laches or estoppel or whatever…'), as opposed to waiver in the form of affirmation in the common law sense (see para 1702 of Chitty (above)). The distinction is drawn by Dillon LJ in the passage from his judgment quoted above, where he says, with reference to the judge's reference to 'affirmation': 'I think he must have meant that in the context of the way the point was being put to him by Counsel, viz. that it would be unjust or [unconscionable] to allow the defendant to take the point'.
As I read Dillon LJ's judgment in Holly Johnson, therefore, (a) it does not directly address the question whether a defence of affirmation in the common law sense is available as a defence to restraint of trade claim (although it gives no indication that it may not be available), but (b) it is authority for the proposition that a general equitable defence such as Sony Music's defence of acquiescence in the instant case is available as a defence to a claim of restraint of trade.
So far as the defence of acquiescence is concerned, therefore, on the authority of Holly Johnson I conclude that such a defence is available as a defence to a restraint of trade claim."
"Turning then to the defence of affirmation, in the absence of direct authority I have to approach the question as one of principle.
Affirmation generally appears in a pleading as a defence to a claim that a contract has been discharged by breach, that is to say in cases where the plaintiff is faced with a choice between either (a) accepting the defendant's breach of contract as a repudiation and treating the contract as discharged on that ground, or (b) allowing the contract to continue. However, I can see no distinction in principle between on the one hand a case in which a contracting party is faced with a choice whether or not to bring the contract to an end by accepting the other party's breach as a repudiation, and on the other hand a case in which a contracting party is faced with a choice whether or not to bring the contract to an end by claiming that it is unenforceable. If affirmation is available as a defence in the former case, I can see no reason in principle why as a general rule it should not be available also in the latter.
As to the public policy considerations which underlie the doctrine of restraint of trade, it is to be borne in mind that (at least in cases falling under the first limb of the Nordenfelt test) it is not for the court to initiate an allegation of restraint of trade 'proprio motu' (see per Lord Diplock in Petrofina p. 180 B). That being so, I can see no reason in principle why special defences arising from the surrounding circumstances - what I may describe as in personam defences - should not run in such cases against a restraint of trade claim.
I therefore conclude that it is open to Sony Music to allege affirmation in this case."
"It is not difficult to postulate hypothetical examples in which the application of Mr Bate's proposition would lead to absurd results. I am in no doubt that the judge correctly relied upon the dicta cited by Mr McCue in Taylor Fashions Limited -v- Liverpool Victoria Trustees Co Limited. Oliver J. said at 915:
"Furthermore, the more recent cases indicate, in my judgment, that the application of the Ramsden -v- Dyson principal (whether you call it proprietary estoppel, estoppel by acquiescence or estoppel by encouragement is really immaterial) requires a very much broader approach which is directed to ascertaining whether, in particular individual circumstances, it would be unconscionable for a party to be permitted to deny that which, knowingly or unknowingly, he has allowed or encouraged another to assume to his detriment rather than to inquiring whether the circumstances can be fitted within the confines of some pre-conceived formula serving as a universal yardstick for every form of unconscionable behaviour."
"…it must be a defence on equitable grounds in the light of all the circumstances of the case - not a defence by mere rule of thumb that the point was not finally and irrevocably insisted on at the earliest possible moment."
"One must always bear in mind that an agreement in restraint of trade is not generally unlawful if the parties choose to abide by it: it is only unenforceable if a party chooses not to abide by it."
"The true view at the present time I think, is this: The public have an interest in every person's carrying on his trade freely: so has the individual. All interference with individual liberty of action in trading, and all restraints of trade of themselves, if there is nothing more, are contrary to public policy, and therefore void. That is the general rule."
"A covenant in restraint of trade (if unreasonable) is void in the sense that courts will not enforce it, but if the parties wish to implement it they would not be acting illegally and the courts would not intervene to prevent them from doing so."
"In my view, if the trustees make those payments they will not expose themselves to any such claims….The managing trustees will have done no more than carry out their side of an (unenforceable) agreement. That would not give the members a cause of action against them."
"Agreements in restraint of trade are often said to be "illegal" or "unlawful" and therefore "unenforceable" and "void". These expressions need to be handled with great care. Agreements can be vitiated and struck down by the law for widely differing reasons, and questions regarding them arise in widely differing circumstances. An agreement to commit a murder is unlawful. The same may be said of an agreement unreasonably restricting the activities of a former employee who wishes to set up a competing business. But the law is not so crude as to treat these two instances as identical in all respects when faced with questions arising out of such agreements.
The law's attitude to an agreement in unreasonable restraint of trade is to decline to assist the parties to enforce it. The agreement does not give rise to legally-binding obligations, and in that sense it is void. But in this context, and whatever may be the position regarding contracts of which the law disapproves for other reasons, being void does not mean that the agreement will be disregarded for all purposes and that the law will proceed as though there never had been an agreement between the parties. On the contrary, the law will countenance the existence of such an agreement. If the parties wish to implement it, they are at liberty to do so. They would not be acting illegally or unlawfully. But if either party chooses to withdraw, the court will not assist the other to enforce the agreement or award him damages for breach. In Esso Petroleum Co Limited -v- Harpers Garage (Stourport) Limited  AC 267, 297, Lord Reid observed:
"One must always bear in mind that an agreement in restraint of trade is not generally unlawful if the parties choose to abide by it: it is only unenforceable if a party chooses not to abide by it."
Earlier, in Mogul Steamship Co -v- McGregor, Gow & Co  AC 25, 39, Lord Halsbury L.C. said regarding contracts in restraint of trade that the law "treats them as if they had not been made at all." But he made that observation in the context of stating that the law will not lend its aid to enforce such contracts. His observation cannot be taken to be directed more widely than this. I am fortified in this view by noting that in Attorney-General of the Commonwealth of Australia -v- Adelaide Steamship Co Limited  AC 781, 797, Lord Parker of Waddington stated:
"It is only necessary to add that no contract was ever an offence at common law merely because it was in restraint of trade. The parties to such a contract, even if unenforceable, were always at liberty to act on it in the manner agreed."
In that case Mogul's case had been cited to the Judicial Committee of the Privy Council.
The only other authority I need mention is O'Sullivan -v- Management Agency and Music Limited  QB 428, 469, where Fox LJ said: "The fact that the agreements were in restraint of trade does not, in my view, render them void. They are unenforceable…" This observation shows how important it is in this area to define one's terms. Agreements in restraint of trade are void in the sense that they do not give rise to legally-enforceable obligations. They are not void in the sense that for all purposes they are treated as non-existent. It is in the latter sense that Fox LJ is to be taken to have been using the term "void" when he said that agreements in restraint of trade are not void."
"In the result, as we understand it, the situation is this. Insofar as the plaintiff has actually executed assignments of copyrights in his compositions to the defendant, that remains effective, and the defendant is entitled to the copyright on the agreed terms as to the plaintiff's share of royalties etc. Insofar as the contract would otherwise have operated as an assignment of copyright in future compositions only under s. 37(1) of the Copyright Act 1956, the contract being unenforceable the section does not operate."
"A person who renders services under a contract that is unenforceable will be entitled to a quantum meruit if the other party has failed to carry out his part, provided the restitutionary claim does not undermine the policy of the statute (or common law rule) rendering the contract unenforceable."
"If the effect of bringing an action on a quantum meruit was simply to enforce the oral contract in some circumstances only, though not in all the circumstances in which an action on the contract would succeed, it might be persuasively contended that the action on a quantum meruit was an indirect means of enforcing the oral contract. So, if all the plaintiff had to prove was that he had fully executed the contract on his part and that he had not been paid the contract price, there would be some force in the suggestion that the proceeding amounted to an indirect enforcement of the contractual cause of action. However, when success in a quantum meruit depends, not only on the plaintiff proving that he did the work, but also on the defendant's acceptance of the work without paying the agreed remuneration, it is evident that the court is enforcing against the defendant an obligation that differs in character from the contractual obligation had it been enforceable."
"The tendency in some past cases to see the rationale of the right to recover remuneration for a benefit provided and accepted under an unenforceable contract as contract or promise rather than restitution has tended to distract attention from the importance of identifying the basis upon which the quantum of the amount recoverable should be ascertained. What the concept of monetary restitution involves is the payment of an amount which constitutes, in all the relevant circumstances, fair and just compensation for the benefit or "enrichment" actually or constructively accepted. Ordinarily, that will correspond to the fair value of the benefit provided (e.g. remuneration calculated at a reasonable rate for work actually done or the fair market value of materials supplied). In some categories of case, however, it would be to affront rather than satisfy the requirements of good conscience and justice which inspire the concept or principle of restitution or unjust enrichment to determine what constitutes fair and just compensation for a benefit accepted by reference only to what would represent a fair remuneration for the work involved or a fair market value of materials supplied. One such category of case is that in which unsolicited but subsequently accepted work is done in improving property in circumstances where remuneration for the unsolicited work calculated at what was a reasonable rate would far exceed the enhanced value of the property. More relevant for present purposes is the special category of case where restitution is sought by one party for work which he has executed under a contract which has become unenforceable by reason of his failure to comply with the requirements of a statutory provision which was enacted to protect the other party. In that category of case, it would be contrary to the general notions of restitution or unjust enrichment if what constituted fair and just compensation for the benefit accepted by the other party were to be ascertained without regard to any identifiable real detriment sustained by that other party by reason of the failure of the first party to ensure that the requirements of the statutory provision were satisfied."
"If a defendant has freely accepted services or goods, then the general rule is that he must pay their reasonable value at the date they were rendered or delivered respectively. Reasonable value is normally market value, that is the sum which a willing supplier and buyer would have agreed upon; any sum awarded would generally include a figure which represents a profit element."
"Some of the parameters for this exercise are not, I think, in issue. The valuation has to be carried out as at the date when the services were rendered and should, as a general rule, approximate to market value. But regard must also be had to any prior negotiations or agreement between the parties which indicate that they put a particular value on the services in question. This may be the best evidence of what constitutes reasonable remuneration for the services rendered and, as a matter of principle, there is some judicial support for the view that the price agreed should be the ceiling for any award."
"533. It is, however, important to note that these are all cases where the agreement between the parties could not be enforced either because it failed to attain the degree of certainty and finality necessary to create a binding contract (Way -v- Latilla); or because of some formal defect (Scarisbrick -v- Parkinson); or due to some supervening event (B.P. Exploration Co -v- Hunt). But for these problems, the agreements would have been enforceable between the parties according to their terms and it is not difficult to see why, in these circumstances, the value placed upon the services by the parties themselves should be given great weight in any determination by the court of the value which should be attributed to the arrangements between those same parties.
534. But in a case where the evidence shows that the contract or agreement was abandoned as the basis of the parties' dealings then the reasoning in Way -v- Latilla ceases to apply. If the correct view is that the parties ceased to regard the original contract price as an appropriate value for the services then there is no justification for the court imposing it as a measure of value unless it can be justified by other evidence as the market value of the services at the time when they were performed. There is a clear difference between an ineffective agreement and one which the parties have effectively jettisoned."
"(1) A court will only imply a contract by reason of the conduct of the parties it if is necessary to do so. It will be fatal to the implication of a contract that the parties would or might have acted as they did without any such contract. In other words, it must be possible to infer a common intention to be bound by a contract which has legal effect. If there were no such intent the claim would fail.
(2) All contracts, to be enforceable must be sufficiently certain to enable the courts to give effect to the parties' intentions rather than to give effect to a contract which the court has had to write for them. On the other hand it can be said that the Courts do not incline to adopt a 'nit-picking' attitude to such matters and will endeavour, where possible, to construe the obligations in a way which gives effect to the parties' bargain. There is a line to be drawn between a generous attitude to making contracts work and striking them down on grounds of uncertainty."
"Furthermore although the judge was referred to British Steel Corporation -v- Cleveland Bridge and Engineering Co Limited  1 All ER 504 he does not seem to have had in mind (possibly because Mr Bartley Jones was not putting no contract as his primary case) important passages in the judgment of Robert Goff J from 509-511. The passages demonstrate the following matters of relevance to the analysis required in this case. First, while parties are negotiating a contract under which they will, if the contract is concluded, enter into reciprocal obligations binding each other as to future performance, it is highly unlikely that by conduct they will conclude in the interim an executory contract containing terms still the subject of negotiation [see 510b-f]. Second it is more likely that they will have entered into what Goff J. refers to as an "if" contract i.e. a contract under which if one party supplies, the other agrees to pay a reasonable remuneration. Third even an "if" contract will not have been entered into if important terms such as those relating to standard of performance are still under negotiation, and in such cases the proper answer is no contract but a restitutionary remedy to the extent that one party has been unjustly enriched [see page 511].
15. There may be little distinction between an "if" contract entitling the provider of services to reasonable remuneration and a restitutionary remedy based on the unjust enrichment of the recipient of the services in many cases but before it is possible to find any contract, whether "if" or executory, it is necessary to analyse precisely the terms so as to test whether the reality is that such terms are still under negotiation and the proper answer is no contract. In Goff and Jones 7th Edition page 662 there is a reference to an article by Professor McKendrick in which the Professor argues that a court should not strain to find a contract because a restitutionary remedy can solve most if not all the problems. [see footnote 7]. That, it seems to me, is the correct approach."
"45. The general principles are not in doubt. Whether there is a binding contract between the parties and, if so, upon what terms depends upon what they have agreed. It depends not upon their subjective state of mind, but upon a consideration of what was communicated between them by words or conduct, and whether that leads objectively to a conclusion that 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. Even if certain terms of economic or other significance to the parties have not been finalised, an objective appraisal of their words and conduct may lead to the conclusion that they did not intend agreement of such terms to be a precondition to a concluded and legally binding agreement."