BRITISH VIRGIN ISLANDS
THE EASTERN CARIBBEAN SUPREME COURT
IN THE HIGH COURT OF JUSTICE
Claim No. BVIHCV2009/0083
IN THE MATTER OF THE ESTATE OF RAPHAEL WILLIAMS, Deceased
THE MOORINGS LIMITED
Mrs. Marie- Lou D. Creque of SCA Creque for the Claimants
Mr. Terrance B. Neale of McW.Todman & Co. for the Defendant
2010: November 05
2010: December 16
Law of contract – binding contract or agreement in principle – unilateral variation
The claimants, in their capacity as administrators for the estate of the deceased, instituted these
proceedings against the defendant claiming damages in the amount of $420,693.95 for works done
by the deceased at the defendant’s facility. Subsequently, the parties met and reached an
agreement on a sum to be paid in full and final settlement of debts due to the estate.
A week after the meeting, the claimants refused to accept the cheque of the agreed amount stating
that the sum agreed upon was greater than initially thought. They sought a further meeting to
review additional documents and receipts which had come to their attention. The defendant
refused to enter into further negotiations, contending that an agreement had already been reached
and that the claimants cannot unilaterally vary the binding agreement.
1. On the facts of the case, a binding agreement was reached by the parties when they met.
This was not an agreement in principle only. 2
2. The claimants cannot unilaterally vary it without the agreement of the defendant.
 HARIPRASHAD-CHARLES J: On 6 March 2009, the claimants, in their capacity as
administrators of the estate of Raphael Williams, deceased (“the deceased”) initiated this
action for breach of contract for certain construction works done by the deceased prior to
his death pursuant to an agreement with the defendant. The claimants seek damages in
the amount $420,693.95 together with interest and costs.
 On 9 November 2010, the parties appeared before me and it was agreed that Judgment
be entered for the claimants against the defendant in the sum of $132,174.30. However,
the remainder of the claim remains disputed. At that hearing, the court ordered that the
parties will provide written submissions on whether the claimants can unilaterally vary the
agreement reached between the parties on 19 March 2008. The following represents my
ruling on this preliminary point.
 In a nutshell, the defendant asserts that it had reached an agreement with the claimants to
pay the sum of $132,174.30 in full and final settlement of all claims due to the estate of the
deceased and therefore, the claimants are estopped from bringing this claim. In other
words, there was a binding contract between the parties which could not be varied
unilaterally by one party.
 The gist of the claimants’ argument is that there was no unilateral variation of the
agreement but rather continued negotiations to settle the exact sum that was outstanding
to them. The claimants further say that whilst there was an agreement, it was never
Some background facts
 In or around March 2007, the defendant entered into an oral agreement with the deceased
to carry out certain construction works to its facility at Wickham’s Cay II, Tortola. Sadly, the
deceased died on 1 January 2008 when the construction works were about 70% complete. 3
The claimants applied for and were granted letters of administration to the estate of the
deceased on 21 February 2008.
 Upon the death of the deceased, the claimants sought to collect funds which were
allegedly due and outstanding to the deceased. The claimants initially made a claim for
$291,915.77 which the defendant rejected.
 In or around March 2008, the parties met to discuss the matter. Based on their
discussions, the claimants agreed to the sum of $132,174.30 in full and final settlement of
all outstanding claims in respect of work carried out on the defendant’s project. The
claimants also agreed that in exchange, they will provide the defendant with the
 The defendant, through its legal advisers, advised the claimants’ solicitors that in keeping
with the Agreement between the parties that a cheque in the sum of $132, 174.30 later
adjusted to $132,636.30, was ready for collection upon presentation of the Release.
However, the claimants refused to accept the cheque stating that “searches for all
documents pertaining to the matter were continually on-going and as telephone calls and
invoices were still being received from persons alleging they were owed funds, which had
to be looked into, the claimants had to vary the agreement when it became clear that the
sum was greater than initially thought.”
 The defendant’s response was that discussions and joint review of documentation had
already been held and that the claimant could not unilaterally vary the agreement. They
refused to enter into further negotiations on the amount.
 The issues which arise for determination are (1) whether the oral agreement reached by
the parties on 19 March 2008 constitutes a binding contract or whether it was an
agreement in principle only; and (2) if it was a binding contract, whether the claimants can
unilaterally vary it?
See paragraph (3) of the Reply filed on 19 June 2009. 4
 Learned Counsel for the defendant, Mr. Neale argues that there was an agreement
between the parties for the defendant to pay the sum of $132,636.30 in full and final
settlement of all claims against the defendant and the claimants cannot unilaterally vary
the terms of that agreement. On the other hand, learned Counsel for the claimants, Mrs.
Creque argues that the agreement was an agreement in principle only, and not binding
until executed by the claimants in a formal document. She asserts that the process of
negotiation was ongoing and inconclusive.
Applicable legal principles
 For convenience, I will start with some general principles of contract law. In the ordinary
case, the law does not require a contract to be made in any particular form, nor according
to any particular formalities. It is sufficient that there be a simple contract. Such a contract
may be validly made either orally or in writing, or partly orally and partly in writing.
 To constitute a binding contract there must be a concluded bargain, and a concluded
contract is one which settles everything that is necessary to be settled and leaves nothing
to be settled by agreement between the parties.
This requirement may be expressed by
way of a general rule that for the parties to be bound they must have finished reaching an
agreement, so that it is possible to infer an intention on the part of both of them to be
 According to the learned authors of Chitty on Contracts
The question whether the parties have reached a complete agreement frequently
arises where there has been an agreement in general terms but the parties have
stipulated for the execution of some further formal document. The problem then is
whether the agreement is too general to be valid in itself and is dependent on the
making of a formal contract, or whether the parties have in fact completed their
agreement so that the execution of a further formal contract is intended only as a
solemn record of the already completed agreement. This is a question of
construction for the court. In the words of Parker J in Von Hatzfeldt-Wildenburg v
Alexander  1 Ch 284, 288-89:
May and Butcher Ltd v R (1929)  2 KB 17n at 21, HL, per Viscount Dunedin.
Hussey v Horne-Payne (1879) 4 App Cas 311, HL.
ed., para 104. 5
“It appears to be well settled by the authorities that if the documents or
letters relied on as constituting a contract contemplate the execution of a
further contract between the parties, it is a question of construction
whether the execution of the further contract is a condition or term of the
bargain or whether it is a mere expression of the desire of the parties as to
the manner in which the transaction already agreed to will in fact go
through. In the former case there is no enforceable contract either
because the condition is unfulfilled or because the law does not recognize
a contract to enter into a contract. In the latter case there is a binding
contract and the reference to the more formal document may be ignored.”
 In the present case, it is common ground that the parties met (without their lawyers) and
reached an agreement on 19 March 2008. The agreement was that the defendant will pay
to the claimants the sum of $132,636.30 in full and final settlement of all claims. This was
to be followed by the issuance of a cheque to the claimants and the claimants undertaking
to sign the release.
 In order to decide whether or not the agreement reached on 19 March 2008 was complete,
it is necessary that I look beyond the simple offer and acceptance to the whole of the
negotiations between the parties. After the meeting on 19 March 2008, a series of
correspondence ensued between Counsel for the claimants, Mrs. Creque and Counsel for
the defendant, Mr. Neale.
 On 20 March 2008, that is, the day after the meeting, Mrs. Creque wrote to Mr. Neale
“I am instructed that our clients met directly this afternoon and have agreed terms
which are as stated in your last email, save and except the difference on the
Caribbean Transport invoice which is for $485.00 as faxed to you and not $65.00
as claimed in your clients note. Kindly amend the release to reflect this. My clients
will attend your offices with the duly executed release and thereafter collect the
 The last email from Mr. Neale dated 19 March 2008 stated:
“Further to our receipt of correspondence on the above matter my client has
advised me that the actual sum due and owing to the Estate is actually
Claimant’s trial submissions, filed 19
November 2010, TAB 2. 6
$132,174.30 and not $291,453.77 previously stated in your Release as the sum of
$159,279.47 had previously been advanced to Mr. Raphael Williams as set out in
the attached spread sheet of summary and expenses.
In the circumstances, we have amended the draft Release to reflect the true state
of affairs and the actual payments to be made to the Estate …”
 Following Mrs. Creque’s correspondence on 20 March 2008, Mr. Neale wrote to his client
the very day. In the email, he said:
Ms. Creque, the lawyer for the administrators advised that they met with you
during the course of the day and as a result of this meeting have accepted that the
sum due and owing to the Estate is indeed $132,174.30 as stated by you and not
the sum previously claimed by them.
The only discrepancy I am advised is the Caribbean Transport invoice where the
sum of $65 was erroneously stated by you in your calculations when this in fact
should actually be the sum of $485 as stated on the actual invoice.
Ms Creque has advised that the Administrators are now willing to sign and deliver
the Release in exchange for the Moorings cheque in the above sum subject to the
qualification in the second paragraph above.
 On 25 March 2008, the defendant duly forwarded a cheque in the sum of $132,636.30 to
Mc W. Todman & Co together with the release to be signed by the claimants.
 Then on 28 March 2008, Mrs. Creque wrote to Mr. Neale in the following words:
“I am instructed that there is still a significant difference between our clients in
respect of the figures. As such, may I propose a meeting whereby our clients may
present their actual invoices in verification of the payments made and what I
understand is alleged to have been an over-payment to the late Mr. Williams.”
 On 1 April 2008, Mr. Neale responded to Mrs. Creque’s letter of 28 March 2008 in this
way. He stated:
“With respect to paragraph 1 of your letter, our clients are taken by surprise at the
position now expressed by your client since same is contrary to what had been
previously represented by you on your clients’. You would no doubt recall that our 7
clients met with your clients and reviewed the various invoices and receipts in the
matter before arriving at an agreed position. We therefore do not think that your
clients, in the absence of a change of circumstances would unilaterally be able to
go back on what had been previously agreed. In this respect we advised that our
client in anticipation of the completion of this matter had in fact forwarded their
settlement cheque to us on the understanding that same would be exchanged for
the executed Release.
In the circumstances we are instructed to inform you that before our clients can
agree to a meeting to discuss the matter further they require your clients to provide
them with the reasons why they have now adopted this new position together with
any supporting documentation which they may have so that our clients can review
same with a view to deciding whether a further meeting with your clients would
serve any useful purpose.
In the meantime our clients reserve all their rights in the matter.”
 The issue of whether or not there was a binding agreement between the parties is a
question of construction for the court. I am satisfied that on the facts and the applicable
legal principles, a binding contract was reached between the parties on 19 March 2008.
This was an agreement reached by the parties which settles everything. It was to be
followed up with the payment of a cheque in the agreed amount and the claimants signing
the release. These were ancillary to the fact that the parties have finished reaching an
agreement. This was not an agreement in principle only. It was the duty of the claimants to
carry out all due diligence before reaching an agreement.
 In my opinion, the execution of the written release cannot be equated to an agreement in
principle where the only proper inference to be drawn is that the parties have not yet
finished agreement. For instance, where they make their agreement conditional, or subject
to contract, or where so many important matters are left uncertain that their agreement is
incomplete. This is a clear case of where the parties reached a binding agreement and
subsequently, the claimants may have found more invoices and now seeks to vary that
agreement unilaterally. This cannot the done. The law is that the parties to a contract may
effect a variation of the contract by modifying or altering its terms by mutual agreement. A 8
mere unilateral notification by one party to the other, in the absence of any agreement,
cannot constitute a variation of the contract.
 In the premises, I will hold that a binding contract was reached between the parties on 19
March 2008 and the claimants cannot unilaterally vary it because they have now found
new invoices. They should have never entered into that agreement or should have agreed
in principle only.
 There will however be a slight variation to the order that I made on 9 November 2010 to
reflect that Judgment be entered for the claimants against the defendant in the sum of
$132,636.30 and not $132,174.30. This is admitted by the defendant’s commercial director
and sole witness, Tanya Whistler.
 There will be no order as to costs.
High Court Judge
Cowey v Liberian Operations Ltd  2 Lloyd’s Rep. 45.