Non-Binding Agreements - David Frost v Wake Smith & Tofields Solicitors

When is failing to document a settlement at mediation negligent?

Clients rely upon their solicitors to document agreements in legally binding terms. If an agreement is reached and reduced to writing but turns out not to bind the parties, can the client claim against the solicitor for negligence?

The Court of Appeal decision in David Frost v Wake Smith & Tofields Solicitors [2013] EWCA Civ 1960 provides a cautionary reminder of why it is always preferable to document any terms agreed by clients in a legally binding agreement as soon as possible. If this is not possible, solicitors may owe a duty to explain the non-binding nature of the agreement to their client.

Pitfalls of a non-binding agreement

No deal despite a signed document - is the client unaware that he is not legally protected? Disagreement on whether the agreement is binding. What are "Heads of Terms" anyway - can one side try to escape the deal after it is done? Deal 'subject to contract' - how long and how expensive is it going to be to perfect the drafting? The unexpected point. Will an overlooked issue (for example, tax on damages) arise preventing the deal being done which could have been wrapped up at the time? The lost relief of...