Tangent Properties (North) Ltd v Evans Homes (Skelton) No 2 Limited

A court deciding whether commercial parties formed a contract must assess their words and conduct throughout the entire course of dealing. A document described as an outline or heads of terms will not be binding where the parties objectively intended a later formal agreement and essential terms remained unresolved. The absence of the words subject to contract is not decisive.

Where an alleged agreement is too uncertain to determine when a payment crystallises, which costs are deductible, or what services are required, it may be unenforceable. Estoppel cannot be used to enforce an uncertain obligation. Where services were freely accepted without an enforceable profit-share agreement, the appropriate unjust-enrichment remedy is ordinarily reasonable remuneration for the services, assessed on a time basis, rather than a share of development profits.

Tangent, as assignee of Mr Nigel Chambers’ claims, sought a 10% profit share from the development of the Skelton Site. It alleged that a profit-share agreement was made with White Rose Development Enterprises Ltd in November 1996 and recorded in a fax dated 6 December 1996. It further alleged that Evans Homes (Skelton) No 2 Ltd, formerly Skelton Business Park Ltd and Templegate Developments Ltd, agreed in August 2005 to be bound by those terms.

The claims were for declarations, an account and damages for breach of contract, alternatively estoppel and unjust enrichment. The central issues were contractual intention, certainty of terms, authority, estoppel, the valuation of accepted services and limitation.

1. Contract formation. The court applied an objective assessment of the parties’ entire course of dealing, including subsequent communications and performance: Pagnan SpA v Feed Products Ltd [1987] 2 Lloyd’s Rep 601; DAZN Ltd v Coupang Ltd [2025] EWCA Civ 1083. In November 1996 the parties agreed in principle that Mr Chambers would receive 10% of specified land-related profits, but intended that the arrangement would be legally contracted later. They had not agreed the services, their duration, a calculation date, the meaning of overall profit or the relevant deductible costs.
2. The 6 December 1996 fax was an outline of continuing involvement, not a binding contract. The subsequent five-year drafting process confirmed that the parties negotiated without treating themselves as bound. The alleged agreement was alternatively too uncertain and unworkable, particularly concerning the crystallisation of the profit share, relevant costs and profit on built development. It also lacked the necessary intention to create legal relations.
3. The August 2005 meeting did not revive or adopt the alleged agreement. The phrase “stick with the existing arrangements” objectively meant living with an ambiguous position, not accepting the fax as binding. Mr Bell lacked actual authority to bind SBPL and did not hold himself out as having authority; there was no board ratification.
4. Estoppel. No clear and unequivocal representation was made that the fax was binding. Mr Chambers did not prove reliance or detriment. In any event, estoppel could not enforce terms too uncertain for contractual enforcement: Baird Textile Holdings Ltd v Marks & Spencer PLC [2001] EWCA Civ 274.
5. Unjust enrichment. SBPL was enriched by services accepted between 2001 and 2009. The enrichment was unjust through failure of basis and free acceptance. The appropriate remedy was reasonable remuneration based on time spent, a reasonable hourly rate and expenses, not a 10% profit share. Benedetti v Sawiris [2013] UKSC 50 and Cobbe v Yeoman’s Row Management Ltd [2008] UKHL 55 were applied. Mate v Mate [2023] EWHC 238 (Ch) was distinguished because the claimant there relied on expert evidence concerning land promotion and remuneration.
6. The contractual, declaration, account and damages claims were dismissed. Relief on unjust enrichment was provisionally available subject to limitation, with any quantum issue to be determined by inquiry. Costs and consequential matters were reserved.