RTS Flexible Systems Ltd v Molkerei Alois Müller GmbH [2010] UKSC 14

Court: UK Supreme Court

Facts: RTS was supplying machinery to Molkerei Alois Müller GmbH, but despite a letter of intent, the final written contract was never signed. Despite this, work commenced, leading to a dispute about the contract's terms when problems arose.

Issue: Did a binding contract exist even though no formal written contract had been finalized?

Held: The court held that a binding contract did exist, based on the parties’ objective conduct. Even though no formal written contract was signed, the actions of the parties indicated they intended to be bound by a contract.

Key Judicial Statement: The court reiterated that a contract can be found to exist based on the objective intent of the parties to be legally bound, even if no formal document is executed.

💡 LevelUpLaw: In contract formation, the absence of a final written agreement does not preclude the existence of a binding contract if the parties’ conduct objectively shows they intended to enter into legal relations.