Sun`s lawyers made a settlement offer to Mr. Newbury`s lawyers in a letter (“letter of offer”) as follows: the English case Malcolm Newbury v Sun Microsystems Ltd,  EWHC 2180 (Q8) illustrates the importance of carefully crafted transaction offers. Although this is not a construction case, the same is natural for construction work. “In order to reach a compromise between the parties, our client agreed to make another settlement offer to the complainant… We submit a draft treaty for approval on Tuesday, June 4. Mr. Newbury`s lawyers then sent a warrant from Tomlin to Sun`s lawyers to record the terms of the agreement. Sun`s lawyers then referred an amended draft contract indicating that the application had been suspended on the terms set out in a waiver statement. The proposed waiver contained not only the agreed terms, but also some additional provisions, including a confidentiality clause.
Mr. Newbury`s lawyers argued that the waiver did not cover the terms of the transaction. Sun`s counsel argued that the letter of offer indicated that the transaction should be recorded in a “duly formulated agreement” and that the waiver was “the properly formulated agreement.” There was therefore a dispute between Mr. Newbury and Sun as to whether a binding agreement had been reached on the terms set out in the letter of offer. The Court found that the acceptance letter had resulted in a binding agreement between the parties. According to the Court of Justice, the provisions of this agreement were that Sun would pay certain amounts to Mr. Newbury in a full and final settlement of the debt and counter-debt until a certain time and that the agreement would be recorded in an agreement formulated accordingly, i.e. an agreement reflecting the terms of the agreement. The implementation of this agreement, formulated accordingly, is not a precondition for the creation of a binding agreement, but merely aims to register the agreement more formally. The court made this decision for the following reasons:- Our client is prepared to settle the entire proceeding by paying the applicant, within 14 days of accepting this offer, the sum of $601,464.98 (the “amount of compensation”) including interest as damages … in the case of a full and final settlement of the debt and against the debt increased by the sum of $180,000 with respect to its legal costs, such a tally, which must be recorded in an agreement formulated accordingly.