You can't bind me: When do negotiations result in a binding contract?

While lawyers will generally advise against it, it is a commercial reality that many arrangements involve a series of ongoing negotiations between parties. If these negotiations break down, a key question is whether a binding contract was ever achieved?

This was the issue before the Supreme Court of Western Australia in Absolute Analogue Inc v Sundance Resources Ltd.

Background

Mr Porter, a geologist, who provided his services through the company Absolute Analogue Inc (Absolute), claimed that there was an agreement between Absolute and Sundance Resources Ltd (Sundance) for Absolute to provide the services of Mr Porter to Sundance for an agreed monthly retainer and share options to be issued directly to Mr Porter.