Establishment of agreements

If you have made arrangements on paper with another party and have both signed them, it is clear that a contract has been concluded. If a discussion arises about such a contract, it is probably about the content and interpretation of the agreements made. Whether an agreement was made at all is then not a subject of discussion.

However, it can be if the agreements are not so clearly set down on paper and signed. Indeed, our lawyers see this discussion come up often enough in their practice. Why? Even in the business sphere, there is often no written contract signed by both parties. That just does not mean that there is therefore no agreement.

An everyday example

A contract is basically nothing more than an agreement made. An everyday example is the product on the shelves at the supermarket. If you pick this up to checkout, an agreement may have been made without words.

The discussions that our lawyers see come along are obviously not about supermarket purchases. Still, the principle remains the same. Your will and statement must match that of the other person. In practice, this often turns out not to be so clear.

The proposal was not right

No doubt you have at one time or another made or received a proposal, verbally or in writing, to or from a business contact. If it states that you are being offered a service for a certain amount, you probably trust that this is indeed the will of the sender. If you then indicate that you want to use the service, then – so it seems – a contract is established. However, it may subsequently turn out that the sender’s will was not accurately reflected at all. Perhaps the amount mentioned was a mistake and it was not the will of the service provider to offer his work for this amount. Thus, you actually did not want the same thing as the other party after all. In such a case, based on other circumstances, it will have to be determined whether or not there is an agreement.

You did not yet agree

Perhaps you have responded to a proposal by saying that the price is agreed to, but that you still have some questions about the conditions or points that, as far as you are concerned, should still be included in the agreement. Then discussion may arise about whether there is already an agreement, or whether you are still negotiating. That too can be judged by various circumstances. The main issue is whether the points that are still unclear are unimportant or, on the contrary, predominate in light of the overall agreement.

You thought the fork was different

If there is an agreement in the first place, that does not necessarily mean that you cannot get out of it. It is conceivable that you accepted a correct offer, but it later turns out that the product or service offered involved something different than you thought. Your will was there, but it was based on an incorrect picture of the situation. Under circumstances it is then possible to annul the agreement, so that you are not bound by it after all. The same applies, incidentally, in the event – this is less common in practice – that your will was the result of things like deceit or even threats.

You are still negotiating

As long as you are still negotiating and there is no signed agreement, you probably assume that you are not yet bound by anything. This is understandable and sounds logical. Nevertheless, in prolonged negotiations, not uncommon in business, caution is advised. Our lawyers regularly deal with claims for damages that have been filed because the plug was pulled on negotiations at a (too) late stage, or because there was in fact already an agreement even though the signatures had not yet been placed. Even when agreement has not yet been reached on all points, things can be a lot less non-committal than expected.

To avoid such situations, a Letter of Intent (LOI) is sometimes concluded. This can be useful as a picket line, but at the same time an improperly formulated LOI can also create problems.

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