Everton Football Club Co Ltd v Sail Group Ltd & Ors
The claimant football club failed to establish on the evidence both that an oral contract had been concluded between it and a football promoter, and that there had been any breach of a warrant of authority by a director of a sports event management business in allegedly purporting to be able to contractually bind the football promoter.
The claimant football club (E) sought a declaration that an agreement for the promotion of a football tournament had been concluded between it and the first defendant football promoter (S), and also sought damages for breach of a warranty of authority against a director (B) of the second defendant (AR), a sports consultancy event management business. S had engaged an agent, and its director (R), to secure the agreement of an English or European team to participate in the tournament in South Africa. E had entered contractual negotiations with S, a South African-based company, to promote E's involvement in the tournament. The precise nature of the relationship of AR to the other parties was contested, with both E and S arguing that AR was acting as agent for the other. E submitted that (1) there had been a concluded oral agreement between it and S when E's solicitor had agreed to the proposed tournament dates during a telephone conversation with B, whereupon B had allegedly stated that E would now receive signed agreements. An exchange of emails was also said to evidence a concluded agreement; (2) AR had warranted that it could conclude an agreement on S's behalf, and if AR lacked such authority, it had acted in breach of its warranty of authority.
(1) It was clearly the parties' common understanding throughout that an agreement would only be concluded once a contract signed by the parties' authorised signatories had been exchanged. There was nothing in the terms of the emails exchanged that suggested the mutual understanding of how an agreement was to be concluded had changed; similar considerations applied to the telephone conversation E relied on (see para.33 of judgment). Moreover, E's assertion of a concluded agreement depended upon an assertion that B had authority to contractually bind S: that proposition was entirely without foundation. It had been apparent from the outset of negotiations that the only person who had authority to bind S had been S's CEO: that had been apparent from the draft agreements that had been circulated, and there had been no suggestion that anyone else, much less B, had been authorised to bind S. Additionally, there was no evidence to suggest that R had actual authority to bind S, and no tenable basis could be proposed to show that R, or his company, had any authority to appoint AR to act as S's agent with authority to bind S. Finally, the terms of the draft E ultimately relied on as containing the terms of the alleged oral agreement were themselves incomplete and inconsistent with, or contrary to, that which E maintained was the true nature of the parties' agreement (paras 35-37). (2) E failed to plead and prove that AR represented that it had authority to act on S's behalf and commit S to a binding agreement. Furthermore, even if such authority had been established, the essential element of reliance had not been pleaded, nor alleged and proven in the course of the trial (paras 41, 45-47).
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