A businessman has won a High Court battle relating to a £15million deal he was alleged to have struck in a London pub.
Sports Direct owner Mike Ashley had been locked in a legal dispute with investment banker Jeffrey Blue, who had claimed that the businessman had promised to pay him the eight-figure sum if he was able to double the share price of the sportswear chain.
The dispute arose following a conversation reputed to have taken place at the Horse and Groom pub four years ago.
During proceedings, Mr Ashley said: “I can’t remember the details of the conversations that we had in the pub as it was a heavy night of drinking. I do remember that we had a lot of drinks and a lot of banter.
“If I did say to Mr Blue that I would pay him £15 million if he could increase (Sports Direct’s) share price to £8, it would be obvious to everyone, including Mr Blue, that I wasn’t being serious.”
Handing down his judgment, Mr Justice Leggatt said: “No reasonable person present in the Horse & Groom [in January 2013] would have thought that the offer to pay Mr Blue £15 million was serious and was intended to create a contract, and no one who was actually present in the Horse & Groom that evening – including Mr Blue – did in fact think so at the time.
“They all thought it was a joke. The fact that Mr Blue has since convinced himself that the offer was a serious one, and that a legally binding agreement was made, shows only that the human capacity for wishful thinking knows few bounds.”
However, on the occasion in question there had been a lot of drinking and a lot of banter. Do not assume that just because an agreement is not written or just because it was concluded in a pub it could not be an enforceable contract. We have acted in a major case in which the Judge found that a contract had indeed been concluded orally and on a golf course (the fifth fairway, as it happens) although no drinking was involved. What matters is whether the parties intended their agreement to be legally binding and enforceable.