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Oral Contract

Business Law

In the case of BVM Management Ltd v Roger Yeomans t/a The Great Hall at Mains and another [2011] the court of appeal dismissed an appeal regarding an oral contract.

In this case the parties had made a new business arrangement.  At a meeting to discuss matters, verbal agreements were made.  A contract was drafted but never finalised and signed.

The case revolved around the issue of whether the contract could be cancelled with three months notice.  BVM Management Ltd was of the understanding the contract was for two years whilst the Yeomans’ believed it could be terminated on three months’ notice.  The court dismissed the appeal by BVM Management Ltd deciding the three month provision was part of the contract that was concluded verbally.  The Yeomans’ were therefore within their rights to terminate the agreement.  This case highlights the importance of having signed agreements in place which document the provisions being agreed to.

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