Danger Of Oral Contract

BVM Management Limited v Roger Yeomans T/A The Great Hall at Mains and Another [2011] EWCA Civ 1254

BVM provided catering and events management services. Yeomans owned The Great Hall at Mains where he operated an events management business. He had a contract with a company to provide catering services which was terminable on three months' notice. The original company was experiencing internal problems, so one of the directors of that company, Mr Middleton, approached Yeomans with a view to setting up a new company to take over the events management. Drafts of a new agreement were circulated between the parties. They all contained a provision for termination on three months' notice, something that was in the previous contract. No one said anything about this provision at meetings between the parties. However, Mr Middleton asked for some security of tenure and it was agreed that the contract should be for 2 years. In the end, the services started, but the contract was never signed. The parties fell out and the question which arose was whether the contract could be terminated on three months' notice.

The Court of Appeal held the County Court Judge had been entitled, on the evidence, to reach a finding of fact that the parties had agreed that the three months termination provision had been part of the contract. The Judge found that Mr Middleton thought that there was a two year term without right to terminate; Yeomans thought that there was...