Agreement by Conduct UK: What it means for Businesses

When it comes to forming a legally binding agreement, many people think of signed contracts as the only option. However, in the UK, there is another form of agreement known as «agreement by conduct.» This type of agreement is based on the actions of the parties involved rather than a written document. In this article, we`ll explore what agreement by conduct means in the UK and what it could mean for businesses.

What is Agreement by Conduct?

Agreement by conduct, also known as implied agreement, is a type of legally binding agreement that is created through the actions of the parties involved. In other words, the agreement is formed through the conduct of the parties rather than a written or oral contract.

One of the most common examples of agreement by conduct is when someone purchases a product from a retailer. Although there may not be a written agreement between the two parties, the act of purchasing the product and the retailer accepting the payment for it creates a legally binding agreement.

Another example of agreement by conduct is when an employee continues to work for a company after receiving a pay raise or promotion. The continued employment and acceptance of the new terms can be seen as agreement by conduct.

How is Agreement by Conduct Enforced?

While there may not be a written contract in place, agreement by conduct is still enforceable under UK law. In order to prove that an agreement by conduct exists, there must be evidence of the actions taken by the parties involved.

For example, if a dispute arises between a retailer and a customer over the terms of a purchase agreement, the retailer may be able to argue that an agreement by conduct was formed through the act of purchasing the product and accepting payment. In this case, the court would look at the actions of the parties involved to determine if a legally binding agreement exists.

What Does it Mean for Businesses?

For businesses, agreement by conduct can be a powerful tool in establishing legally binding relationships with other parties. However, it is important to be aware of the potential risks involved.

Without a written contract, it can be difficult to establish clear terms and conditions for an agreement. This can lead to disputes and confusion down the line. Additionally, relying solely on agreement by conduct can leave a business vulnerable to legal challenges if there is no clear evidence of the agreement.

To mitigate these risks, businesses should consider incorporating written contracts into their agreements whenever possible. This can provide a clear record of the terms and conditions of the agreement, making it easier to enforce later on if necessary.

Conclusion

Agreement by conduct is a legally binding form of agreement in the UK that is based on the actions of the parties involved. While it can be a useful tool for businesses, it is important to be aware of the potential risks involved. By incorporating written contracts into their agreements, businesses can provide a clear record of the terms and conditions of the agreement, making it easier to enforce later on if necessary.