Agreement To Agree Or Agreement?

Side letters are often used by parties (i) in place of formal contracts, (ii) to provide assurance in relation to future contracts and (iii) to document any last-minute changes to contracts. The difficulty is that they are not always written in such a way as to be legally binding.

This sixteenth issue of Insight considers the decision of the Court of Appeal in Barbudev v Eurocom Cable Management Bulgaria EOOD & Ors [2012] EWCA Civ 548, and provides practical advice on what to do if (i) you want a binding side letter, (ii) you do not want a binding side letter and (iii) how to proceed if you want only part of your side letter to be binding.

Side letters are the equivalent of letters of intent which are commonly used in the construction industry. The legal principles referred to in this issue of Insight therefore apply equally to letters of intent and side letters.