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Promotion and Pre-Incorporation Contracts, Royal Mail Estates Ltd v Maple…
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Royal Mail Estates Ltd v Maple Teesdale (2015): Maple Teesdale promoted Kensigntion Gateway Holdings. RM contracted to sell a piece of property to Kensington. The contract provided that the word buyer referred to Kensington and it was signed for and on behalf of the buyer followed by Maple Teesdale pp Buyer. When the agreement was entered into, Kensington had not been incorporated but neither RM or MT knew this. MT decided not to go ahead with the purchase and so RME sued, claiming that under s. 51, MT was personally liable on the contract. Clause 24.1 of the contract stated that ‘the benefit of the contract is personal to the Buyer’ and MT argued that this constituted an agreement to the contrary. MT applied to have the case summarily dismissed.
The court stated that ‘there is only a contrary agreement... if there is found to be an agreement between the parties by which they intended to exclude the [s. 51] effect’. As neither RME nor MT knew that Kensington had not been incorporated at the time of the contract, it followed that they could not have had in mind s. 51 when they agreed the words in clause 24.1. Accordingly, clause 24.1 did not amount to an agreement to the contrary and MT’s application was refused.