3DM (3DMA) PTE Ltd. v 3DM 3DM Worldwide Plc

A contract is not formed merely because a party has agreed to the wording of a proposed document. The court must determine objectively whether the parties intended to be immediately bound, or instead intended to become bound only when the document was approved, signed or released after specified matters were resolved.

Where the person conducting negotiations lacks authority to conclude the contract, signature by the other party does not establish a binding agreement. The distinction between assent to contractual wording and assent to be bound by the contract itself remains important.

3DMA claimed that a consultancy agreement had been concluded with 3DMW during a meeting at which 3DMA’s representative signed a draft document witnessed by 3DMW’s consultant. The space for 3DMW’s signature remained blank, and issues concerning 3DMA’s share structure, investment arrangements and business organisation remained unresolved.

The central question was whether the meeting produced an immediately binding contract or merely recorded terms which would take effect after approval and resolution of the outstanding matters.

1. Claim dismissed. 3DMA failed to establish that a legally binding consultancy contract was entered into on 21 December 2004. Judgment was therefore given for 3DMW.
2. The negotiations and correspondence showed that the consultancy arrangement had not previously been concluded. Although 3DMW had instructed Mr Hancock to take matters forward, he had not been authorised to conclude an immediately binding contract on its behalf. His role was to progress negotiations and obtain a signed document while wider structural issues remained unresolved.
3. The signed document did not establish contractual formation. The document signed by 3DMA contained terms different from those in the draft which Mr Hancock was likely to have brought to the meeting. That substantially undermined the evidence that the parties had reached and assented to a final binding bargain. The court also rejected reliance on an alleged memorandum and invoice, because their provenance and transmission were not established.
4. The subsequent correspondence was equivocal or supported the conclusion that the agreement would take effect only after matters affecting 3DMA had been resolved. The court rejected the argument that 3DMW had first agreed a contract and later attempted to impose new conditions.
5. The conclusion illustrated the distinction identified by Lord Justice Potter in Sun Life Assurance Company of Canada v CX Reinsurance Company Limited [2003] EWCA Civ 283: agreement to contractual wording is distinct from assent to be bound by the contract itself once drawn up and executed.