Maple Leaf Macro Volatility Master Fund v Rouvroy

English Contract Law

Maple Leaf Macro Volatility Master Fund v Rouvroy
Image: ‘Still Life with Vodka and Herring’ by Roxana Paul

Note: To read about this case in greater depth, and with the benefit of full OSCOLA referencing, simply purchase a copy of ‘The Case Law Compendium: English & European Law’ at Amazon, Waterstones or Barnes & Noble (or go here for a full list of international outlets)


When consideration is given by at least one party to a contract (whether interim or final) it becomes in principle, very hard for the other party to claim no contract could stand, irrespective of signatures or third-party withdrawal. In this case, the founder-directors of a beverage firm sought to rescind an agreement between themselves and a hedge fund provider, despite a long-standing commercial history, and openly agreed terms of engagement.

After enjoying moderate success as an alcoholic drinks manufacturer, and having recently acquired a smaller company as part of their expansion, it was decided that the time had come to recoup on their investment, and so a controlling share of their business was sold to a large financial holdings company. Within a year, the working relationship between the investors and owners deteriorated, to the degree that the appellants moved to buy back their company and regain controlling influence.

As part of this reversion, the terms of the arrangement required them to obtain significant loans within a very narrow timeframe, which themselves provided stakeholder rights to the lenders. During the construction of the funding package, the defendants took the step of paying the monies loaned directly to the controlling firm, as part of their commitment to the loan arrangement and repurchase scheme. When a third party to the draft contract renegotiated a different arrangement with the appellants, they declined to add their signature to the final agreement, leaving only the appellants’ and defendants’ ink upon the document.

It was then argued by the appellants that the absence of a third signature rendered the contract void, and so there now existed no binding obligation on their part to continue with the loan or invitation to share control. When stripped down and reassembled in its proper context, it was found by the Court of Appeal that due to the significant consideration given by the defendants, there was sufficient evidence to show an enforceable contract that bound both signatories, despite the reluctance of the third party.

Key Citations

“In the first place, there was no requirement either within or outside the Funding Agreement that it would only become binding when signed.”

“The fact that the agreement envisages a signature and leaves a space for those signatures is not a “prescription” that the agreement can nil become binding on the appending of signatures.”

“[A]lthough no contract can be made without an intention to be legally bound, that intention has to be ascertained objectively, not by looking into the parties’ minds.”

“[T]hat there was objectively an intention to be bound was the fact that the appellants had signed Version 9.”

“Maple Leaf were themselves doubtful whether a binding agreement had been made, but nevertheless paid this not inconsiderable sum in the hope that it would in due course be concluded, by a court if necessary, that there was indeed a binding agreement.”

Author: Neil Egan-Ronayne

Author, publisher and foodie...

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s