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.
For advice on our dispute resolution services please contact our head of department Seamus Smyth or visit our website.
