Reveille Independent Llc v Anotech International (UK) Ltd

A contractual requirement for signature may be waived by the party for whose benefit it was included. Clear and unequivocal conduct may then accept an offer and form a binding contract, provided the offeror suffers no material prejudice from the absence of signature.

Whether conduct amounts to acceptance is assessed objectively and in its commercial context. Performance of the agreed work, conferral of contractual rights, and conduct treating the counterparty as a licensee may show that the parties acted pursuant to a contract rather than merely in anticipation of one. Later conduct may confirm the existence and terms of the contract, although it cannot itself constitute the earlier acceptance.

Reveille and Anotech negotiated a licensing and product-integration arrangement for MasterChef US. Anotech returned an amended and signed Deal Memo on 28 February 2011. The document stated that it would not bind Reveille until both parties executed it, but Reveille did not sign.

Reveille nevertheless integrated Anotech’s products into three programmes, permitted use of the MasterChef brand and treated Anotech as a licensee. The Commercial Court held that Reveille had accepted Anotech’s counter-offer by conduct and awarded $1,010,000, interest and costs: [2015] EWHC 726 (Comm).

Anotech appealed, contending that the signature condition prevented a contract and that the parties’ acts were merely preparatory. The central issue was whether Reveille’s conduct created a binding contract on the Deal Memo’s terms.

Appeal dismissed. Cranston J, with whom Underhill and Elias LJJ agreed, upheld the finding that the Deal Memo became a binding contract around 12 March 2011.

1. Acceptance may be effected by conduct where, objectively, that conduct manifests acceptance. An unsigned draft may therefore have contractual force where the essential terms are agreed and the parties’ conduct shows assent. The court applied the realistic commercial approach reflected in Brogden v Metropolitan Railway Co and RTS Flexible Systems v Molkeroi Alois Muller GmbH, [2010] UKSC 14.

2. The signature provision was for Reveille’s benefit. Reveille, as offeree of Anotech’s amended Deal Memo, could waive that prescribed mode of acceptance by clear and unequivocal conduct. The waiver was effective because Anotech suffered no relevant prejudice. Any uncertainty caused by the absence of signature was insignificant beside Anotech’s receipt of the benefits of Reveille’s performance and its active facilitation of that performance.

3. Reveille’s acts were unequivocal acceptance. It integrated Anotech’s products into programme production, authorised use of the MasterChef intellectual property at the Chicago show, publicly presented Anotech as a partner, and treated it as one of its licensees. Anotech knew of and participated in those acts. By about 12 March 2011, recording had started, the show had ended, publicity had issued and Reveille was treating Anotech as a licensee. The parties were therefore performing the Deal Memo, not merely preparing for a future agreement.

4. Conduct after that date did not itself accept the offer, but was legally relevant evidence that both parties believed a binding contract existed. Reveille continued performance; Anotech used the licence, participated in licensee communications, assisted production and later acknowledged that the initial payments were due under the Deal Memo. Fox approval was neither a contractual precondition nor an impediment to formation.

5. Reveille’s later request that Anotech sign an unamended Deal Memo was not a counter-offer capable of terminating Anotech’s earlier offer. The contract had already been concluded. The request was an attempt to obtain an executed document reflecting the contract being performed. The lower court’s monetary order therefore stood.

• Court of Appeal (Civil Division). Dismissed Anotech’s appeal and upheld the conclusion that the Deal Memo was a binding contract: [2016] EWCA Civ 443.
• High Court, Commercial Court. HHJ Mackie QC held that Reveille accepted Anotech’s amended Deal Memo by conduct and ordered Anotech to pay $1,010,000, interest and costs: [2015] EWHC 726 (Comm).