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ARTICLE · 15 FEBRUARY 2016

Do we have an agreement? When having the will is not enough

The case highlights uncertainty that can be created if negotiations are not formally recorded in an executed agreement.

AustraliaCorporate/Commercial Law

If, as part of negotiating a contract, your lawyer states that you will sign a document, is this enough for you to be bound by the contract? This was the question before the NSW Court of Appeal in Pavlovic v Universal Music Australia Pty Limited.

Background

In 2005, Mr Pavlovic and Universal Music Australia Pty Limited (Universal) entered into a joint venture arrangement to run a recording label, Modular Recordings Pty Limited (Modular).

In September 2014, the parties, through their lawyers, started negotiations to end the joint venture through a Deed of Release and Settlement.

In December 2014, Universal's lawyers sent the draft Deed of Release (the Proposed Deed) to Mr Pavlovic's lawyer, who stated that Mr Pavlovic will sign the Proposed Deed. Universal's lawyers responded, allowing Mr Pavlovic "a further 48 hours to sign the documents and forward copies to us".

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