Dhanani v Crasnianski  EWHC 926
Contract Law – Intention to Create Legal Relations – Agreement to Agree
The defendant, Mr Crasnianski was a scientist and inventor. He met the claimant, Mr Dhanani by chance on the Eurostar whilst travelling from Paris to London. Mr Dhanani had worked as a vice president of DeutscheBank and was familiar with wealth management and private equity investment. After their conversation on the train, they met again and signed a term sheet setting out the goals of their partnership, and under which the defendant agreed to provide €50 million of his personal wealth to the claimant, which the claimant was then to invest in a newly created private equity fund which he managed. After falling out, the defendant no longer wished to invest the money. The claimant sued him for damages for £11.3 for breach of contract. The defendant denied this and counterclaimed for the sums already advanced.
Whether the signed ‘term sheet’ between the parties evidenced an intention to create legal relations or not. Whether or not there was an agreed contract, or only an agreement to create an agreement in the future.
There was no enforceable contract. The term sheet set out the parties’ intentions but it was not capable of being carried into effect without further agreement between the parties. It was therefore no more than an agreement to agree in the future the terms which were necessary to enable the agreement to be carried out. Whilst the parties may have subjectively considered themselves bound by the agreement, a court must look objectively at the whole course of the parties’ conduct, and an agreement is not binding simply because the parties consider it to be.