Court awards former Manly Warringah Sea Eagles player damages over unfulfilled contract

21 Dec 2016

Kemp Strang acted for Jordan Latham who has been awarded damages in his contractual dispute with Manly Warringah Sea Eagles.

On 20 December 2016, the Court delivered judgment in the matter of Jordan Latham v Manly Warringah Sea Eagles Limited (Manly).

Mr Latham is a rugby league football player who had been retained by Manly in 2014 and 2015.

Prior to the commencement of the 2016 season, Mr Latham's manager received an email from Manly's recruitment manager which contained the following words:

"I can ... offer $XX,XXX [for the 2016 season]."

A few days later, after discussions between Mr Latham and his manager, Mr Latham's manager sent an email to Manly's recruitment manager with the following words:

"We would like to agree on the below. Could you draw up a contract and I will get it signed ASAP."

A number of months later, Manly communicated to Mr Latham that it would not be honouring the agreement struck in the email chain described above and in May 2016, Mr Latham commenced proceedings against Manly seeking to enforce the contract contained in those emails.

Manly defended the proceedings on two main grounds:

  1. Firstly, Manly alleged that the case fell within the third category identified in Masters v Cameron (1954) 91 CLR 353 at 360, namely "the intention of the parties was not to make a concluded bargain at all, unless and until they execute a formal contract".
  2. Secondly, in circumstances where the National Rugby League Rules require a contract to be registered in a certain form for a player to play rugby league for a club in the NRL, that there could be no contract until such time as the contract was registered by the NRL.

In answer to Manly's defences, the court found that:

  1. Firstly, it is important that the substance of the words contained in the email sent by Mr Latham's manager meant that Mr Latham's manager had accepted the offer put to him by Manly. The form of the words accepting the offer was unimportant in this case.
  2. Secondly, while the Masters v Cameron categories are useful, the decisive issue is always the intention of the parties objectively ascertained from the terms of the correspondence read in light of the surrounding circumstances. The emails on their proper construction make clear that the parties intended to be bound. Mr Latham was offered a certain sum to play for Manly and clearly communicated his acceptance of that offer.
  3. Thirdly, the NRL Rules do not prevent a player and a club from entering into a contract which does not comply with the Rules. Rather, a player and a club can enter into an agreement once the essential terms of that agreement have been agreed (in this case, the salary and that Mr Latham would be employed by Manly as a rugby league player). In such a case, there is a clear implied term that the parties would do all things necessary to execute any document required to give effect to the agreement (such as a contract that complied with the NRL Rules).

The case highlights again that a Court is not bound by a private organisation's rules. It will interpret contracts with reference to the Law and with reference to the parties' objective intentions as to whether or not they intended to be bound by an agreement.

The case further highlights the importance of clearly expressing when a party intends to be bound by an agreement. It may assist parties (although it will not of itself necessarily be determinative) to state that negotiations will not be finalised and/or that no contract will come into existence until such time as further terms are negotiated and/or until such time as a formal, written deed or contract is executed by the parties.

If you would like to discuss this case or any contractual dispute, please do not hesitate to contact partner, Roppolos [at] kempstrang [dot] com [dot] au (Sarina Roppolo) or Senior Associate, marsdeni [at] kempstrang [dot] com [dot] au (Ian Marsden). 

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