Mike Ashley victory ‘reinforces importance of written contracts’
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The controversial owner of Newcastle United and Sports Direct has won a High Court battle over a £15 million deal allegedly made in a London pub.
Jeffrey Blue, an investment banker, told a judge that Mike Ashley promised to pay him the money if he used his expertise to double Sports Direct’s share price to £8. Blue said Ashley paid only £1 million and that therefore he was claiming wanted £14 million damages. Ashley denied the claim and said Blue was talking “nonsense”.
Mr Justice Leggatt was told that the dispute centred on a conversation held four years ago at the Horse and Groom pub in London, near the flagship store of Sports Direct. Ruling in Ashley’s favour yesterday, the judge said no one would have thought what was said in the pub was “serious”.
Lawyers were not surprised by the ruling. The decision “reinforces the importance of written contracts being in place when agreeing terms on big business deals,” David Allen, a partner at the US law firm Mayer Brown’s London office, said. “While a contract can be legally binding without any paperwork at all, in such circumstances it would be a significant task to provide proof that a verbal contract existed and, if so, the scope of its terms.”
Fiona Parry, a partner at the Liverpool-based law firm Hill Dickinson, added that it was “a fundamental principle of contract law that there needs to be the necessary intention to create legal relations – and a drink fuelled conversation in a pub didn’t hit the mark”.