UK Court of Appeal rules that informal profit-sharing discussions did not create a binding agreement in EJW Builders v Marshall

The UK Court of Appeal has ruled in EJW Builders Ltd v Marshall [2026] EWCA Civ 911, handed down on 20 July 2026, that a series of discussions and documents referencing profit-sharing arrangements did not give rise to a legally binding contract. The case raises fundamental questions of English contract law: whether the conduct and communications of the parties, even absent a formally signed agreement, can be sufficient to create enforceable obligations. The central legal question is one of contractual formation: did the profit-sharing discussions reach the threshold of offer, acceptance, and certainty of terms required for a binding contract under English law, or were they merely negotiations that never crystallised into enforceable rights? English courts have historically required that all material terms be sufficiently certain for a contract to be binding, and that both parties intended to create legal relations, not merely explore commercial possibilities. Documents generated during the course of negotiations, such as term sheets, heads of terms, or internal correspondence referring to a proposed profit-sharing structure, can be highly material in this analysis. Courts will examine whether such documents evidence a concluded agreement or merely a continuing negotiation. The Court of Appeal dismissed the appeal by EJW Builders Ltd, upholding the trial judge's finding that the profit-sharing discussions never materialised into a legally binding agreement and that the parties' relationship was governed by a JCT building contract dated 17 June 2019. The builders had claimed an oral partnership or joint venture over the redevelopment of a former hotel, entitling them to a third of the development profits plus costs and a weekly salary. No deal values or legal advisers are named in the sourced material.