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Edwards v Skyways Ltd (1964) Queen's Bench
The plaintiff was engaged as a pilot by the defendant airline. The firm intended to render several pilots, including the complainant, redundant. The corporation engaged in negotiations with the British Air Line Pilots Association, which represented the plaintiff and others. During a meeting, it was agreed that each terminated pilot would be presented with:
“an ex gratia payment equivalent to the company’s contribution to [that
pilot’s] pension fund.”
The company stated that the agreement was for an amount 'about equal to' the contributions. The plaintiff asserted the payment, but the corporation rescinded the agreement, contending that it was not legally binding.
Held the agreement was enforceable. (I) (2.2.2) There was an intention to
create legal relations, (i) Per Megaw J:
…the subject matter of the agreement is business relations, not social or
domestic matters… In a case of this nature, the onus is on the party who
asserts that no legal effect is intended, and the onus is a heavy one.
ii) The term ex gratia in the agreement indicated that the corporation did not acknowledge any pre-existing legal obligation to render the payment, rather than implying that the arrangement itself lacked legal validity. (II) The agreement was sufficiently definite to be enforceable. According to Megaw J:
At most, ‘approximating to’, if that were the contractual term, would on
the evidence connote a rounding off of a few pounds downwards to a
round figure.
The plaintiff was engaged as a pilot by the defendant airline. The firm intended to render several pilots, including the complainant, redundant. The corporation engaged in negotiations with the British Air Line Pilots Association, which represented the plaintiff and others. During a meeting, it was agreed that each terminated pilot would be presented with:
“an ex gratia payment equivalent to the company’s contribution to [that
pilot’s] pension fund.”
The company stated that the agreement was for an amount 'about equal to' the contributions. The plaintiff asserted the payment, but the corporation rescinded the agreement, contending that it was not legally binding.
Held the agreement was enforceable. (I) (2.2.2) There was an intention to
create legal relations, (i) Per Megaw J:
…the subject matter of the agreement is business relations, not social or
domestic matters… In a case of this nature, the onus is on the party who
asserts that no legal effect is intended, and the onus is a heavy one.
ii) The term ex gratia in the agreement indicated that the corporation did not acknowledge any pre-existing legal obligation to render the payment, rather than implying that the arrangement itself lacked legal validity. (II) The agreement was sufficiently definite to be enforceable. According to Megaw J:
At most, ‘approximating to’, if that were the contractual term, would on
the evidence connote a rounding off of a few pounds downwards to a
round figure.
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