Contract law update: Rugby league player wins damages for email contract reneged by Manly Sea Eagles

In December last year, former Manly Warringah Sea Eagles player Jordan Latham was awarded damages for an unsatisfied contract that was created by email. Mr Latham played in the lower grades of the Manly team. His coach, Mr Toovey, decided that he wanted to make Latham a full-time team member. Before the 2016 season started, Latham’s manager received an email from Manly’s recruitment manager stating:

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

Sydney Morning Herald reported that the deal was worth approximately $55,000.00 for the season. A few days later, Latham’s manager replied to the email:

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

A few months later, the Sea Eagles withdrew from the deal. During this interim period, Mr Toovey had been axed as coach. At this point, most NRL clubs had already contracted players. With no other options available, Latham joined the Asquith Magpies. Latham told the Sydney Morning Herald:

I’ve got down to Asquith and started enjoying my footy again. But it’s not where I want to be, I think I’m a lot better than that.

In May 2016, Latham commenced proceedings against the Sea Eagles seeking to enforce the contract outlined in the emails.

The Sea Eagles argued two main defences for their claim:

  1. The parties did not intend to make a concluded agreement, unless and until they signed a formal contract; and
  2. The NRL requires that contracts be registered in a particular form for a player to play for an NRL club. This contract was not in the required form.

The Court found that:

  • What was important was that the substance (not form) of the words in the email indicated that the offer had been accepted.
  • The most important issue was the intention of the parties objectively ascertained from the terms of the correspondence, supported by surrounding circumstances.
  • The Court found that the rules of the NRL did not prevent a player from entering into a contract that breaches or does not comply with these rules. When an NRL club and player create a non-conforming contract, there is an implied term that the parties will do all things necessary to execute a contract that complies with the NRL rules.

What does the case teach us about contract law?

We can take a few key lessons from this case:

  1. Be careful how you express an offer or acceptance of a contract. If you do not intend to be bound by an offer or agreement before a formal contract is executed, you need to express this clearly in correspondence.
  2. Rules of private organisations will have little weight if a reneged contract reaches the courtroom. When enforcing a contract, a Court is not bound by the rules of a private organisation.
  3. Contracts do not just come in the form of formal agreements. They can be oral or written, including email correspondence.

Has a party reneged on a contract offer made to you? Are you disputing the existence of a contract? Please don’t hesitate to contact our experienced solicitors at Butlers Business and Law on (02) 4929 7002 or fill out an enquiry form on our website.