RTS Flexible Systems Ltd v Molkerei Alois M\u00fcller [2010] UKSC 14<\/strong><\/p>\nValid contract concluded despite \u201csubject to contract\u201d clause<\/p>\n
Facts<\/h3>\n
The claimant was a supplier of automated machines and agreed to manufacture an automated system in the defendant\u2019s factory. Work began on the basis of a letter of intent with a long form contract to follow. The letter of intent expired whilst negotiations on the long form contract continued. A dispute arose as to whether the defendants\u2019 performance requirements were satisfied by the machines delivered by the claimants.<\/p>\n
Issues<\/h3>\n
The claimant sued for the balance of the purchase price on the basis that either a continuing contract or a new contract formed upon expiry of the letter of intent or that it was entitled to be paid a reasonable sum on a quantum meruit<\/em> basis. The defendant counterclaimed for damages on the basis that the parties had concluded a simple contract which had no limitation on liability. The High Court held that after the letter of intent expired a new contract was concluded which applied retrospectively. The Court of Appeal held that there had been no contract.<\/p>\nDecision \/ Outcome<\/h3>\n
The defendant successfully appealed to the Supreme Court. The Court considered the communication between the parties in terms of words and conduct and whether it could be objectively concluded that honest sensible businessmen in the position of the parties intended to enter legally binding relations. In the circumstances, the idea that there was no contract was unconvincing. Where a contract is negotiated \u201csubject to contract\u201d and work begins before the final contract is executed, it depends on the circumstances whether the parties had waived the subject to contract term. In the instance case, the unequivocal conduct of the parties led to the conclusion that they had made a binding agreement to waive the \u201csubject to contract\u201d provision.<\/p>\n","protected":false},"excerpt":{"rendered":"
The claimant was a supplier of automated machines and agreed to manufacture an automated system in the defendant\u2019s factory. Work began on the basis of a letter of intent with a long form contract to follow. <\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[85],"class_list":["post-6433","post","type-post","status-publish","format-standard","hentry","category-cases","tag-uk-law"],"yoast_head":"\n
RTS Flexible Systems Ltd v Molkerei | LawTeacher.net<\/title>\n<meta name=\"description\" content=\"The claimant was a supplier of automated machines and agreed to manufacture an automated system in the defendant\u2019s factory. Work began on the basis of a letter of intent with a long form contract to follow.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.lawteacher.net\/cases\/rts-flexible-systems-v-molkerei.php\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"RTS Flexible Systems Ltd v Molkerei\" \/>\n<meta property=\"og:description\" content=\"The claimant was a supplier of automated machines and agreed to manufacture an automated system in the defendant\u2019s factory. Work began on the basis of a letter of intent with a long form contract to follow.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.lawteacher.net\/cases\/rts-flexible-systems-v-molkerei.php\" \/>\n<meta property=\"og:site_name\" content=\"LawTeacher.net\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/LawTeacherNet\/\" \/>\n<meta property=\"article:author\" content=\"https:\/\/www.facebook.com\/LawTeacherNet\" \/>\n<meta property=\"article:published_time\" content=\"-0001-11-30T00:00:00+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.lawteacher.net\/wp-content\/uploads\/2025\/07\/LT-large-logo.webp\" \/>\n\t<meta property=\"og:image:width\" content=\"1920\" \/>\n\t<meta property=\"og:image:height\" content=\"1080\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/webp\" \/>\n<meta name=\"author\" content=\"LawTeacher\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@LawTeacherNet\" \/>\n<meta name=\"twitter:site\" content=\"@LawTeacherNet\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"LawTeacher\" \/>\n\t<meta name=\"twitter:label2\" content=\"Estimated reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"ScholarlyArticle\",\"@id\":\"http:\/\/64.226.118.242:8001\/cases\/rts-flexible-systems-v-molkerei.php#article\",\"isPartOf\":{\"@id\":\"http:\/\/64.226.118.242:8001\/cases\/rts-flexible-systems-v-molkerei.php\"},\"author\":{\"name\":\"LawTeacher\",\"@id\":\"https:\/\/wp.lawteacher.net\/#\/schema\/person\/b99962c073c877c4ab8ee3d2486cd56e\"},\"headline\":\"RTS Flexible Systems Ltd v Molkerei\",\"datePublished\":\"-0001-11-30T00:00:00+00:00\",\"mainEntityOfPage\":{\"@id\":\"http:\/\/64.226.118.242:8001\/cases\/rts-flexible-systems-v-molkerei.php\"},\"wordCount\":315,\"publisher\":{\"@id\":\"https:\/\/wp.lawteacher.net\/#organization\"},\"keywords\":[\"UK Law\"],\"articleSection\":[\"Case Summaries\"],\"inLanguage\":\"en-GB\"},{\"@type\":\"WebPage\",\"@id\":\"http:\/\/64.226.118.242:8001\/cases\/rts-flexible-systems-v-molkerei.php\",\"url\":\"http:\/\/64.226.118.242:8001\/cases\/rts-flexible-systems-v-molkerei.php\",\"name\":\"RTS Flexible Systems Ltd v Molkerei | LawTeacher.net\",\"isPartOf\":{\"@id\":\"https:\/\/wp.lawteacher.net\/#website\"},\"datePublished\":\"-0001-11-30T00:00:00+00:00\",\"description\":\"The claimant was a supplier of automated machines and agreed to manufacture an automated system in the defendant\u2019s factory. Work began on the basis of a letter of intent with a long form contract to follow.\",\"breadcrumb\":{\"@id\":\"http:\/\/64.226.118.242:8001\/cases\/rts-flexible-systems-v-molkerei.php#breadcrumb\"},\"inLanguage\":\"en-GB\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"http:\/\/64.226.118.242:8001\/cases\/rts-flexible-systems-v-molkerei.php\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"http:\/\/64.226.118.242:8001\/cases\/rts-flexible-systems-v-molkerei.php#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/wp.lawteacher.net\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"RTS Flexible Systems Ltd v Molkerei\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/wp.lawteacher.net\/#website\",\"url\":\"https:\/\/wp.lawteacher.net\/\",\"name\":\"Law Teacher\",\"description\":\"The Law Essay Professionals\",\"publisher\":{\"@id\":\"https:\/\/wp.lawteacher.net\/#organization\"},\"alternateName\":\"LawTeacher.net\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/wp.lawteacher.net\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-GB\"},{\"@type\":\"Organization\",\"@id\":\"https:\/\/wp.lawteacher.net\/#organization\",\"name\":\"Law Teacher\",\"alternateName\":\"LawTeacher.net\",\"url\":\"https:\/\/wp.lawteacher.net\/\",\"logo\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-GB\",\"@id\":\"https:\/\/wp.lawteacher.net\/#\/schema\/logo\/image\/\",\"url\":\"https:\/\/www.lawteacher.net\/wp-content\/uploads\/2025\/07\/LT-logo.jpg\",\"contentUrl\":\"https:\/\/www.lawteacher.net\/wp-content\/uploads\/2025\/07\/LT-logo.jpg\",\"width\":250,\"height\":250,\"caption\":\"Law Teacher\"},\"image\":{\"@id\":\"https:\/\/wp.lawteacher.net\/#\/schema\/logo\/image\/\"},\"sameAs\":[\"https:\/\/www.facebook.com\/LawTeacherNet\/\",\"https:\/\/x.com\/LawTeacherNet\",\"https:\/\/api.whatsapp.com\/send\/?phone=447723491966&text&type=phone_number&app_absent=0\"],\"description\":\"Law Teacher provides academic writing services for law students throughout the world.\",\"email\":\"contact@lawteacher.net\",\"telephone\":\"+44 115 966 7966\",\"numberOfEmployees\":{\"@type\":\"QuantitativeValue\",\"minValue\":\"51\",\"maxValue\":\"200\"}},{\"@type\":\"Person\",\"@id\":\"https:\/\/wp.lawteacher.net\/#\/schema\/person\/b99962c073c877c4ab8ee3d2486cd56e\",\"name\":\"LawTeacher\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-GB\",\"@id\":\"https:\/\/wp.lawteacher.net\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/4fdfab0a9ef25209f111018ecc8a983e19e57c5066a9277217a119582ccbeed3?s=96&d=mm&r=g\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/4fdfab0a9ef25209f111018ecc8a983e19e57c5066a9277217a119582ccbeed3?s=96&d=mm&r=g\",\"caption\":\"LawTeacher\"},\"description\":\"LawTeacher.net is the UK's leading provider of academic legal support, offering both writing services and an extensive collection of law study resources for students in the UK and overseas. Founded in 2003 by Grey's Inn graduate Barclay Littlewood, the Company was built on a commitment to excellence, with unique guarantees and a high standard of service from day one. The team includes over 500 UK legally qualified writing experts, with many practising solicitors and barristers, and several former lecturers.\",\"sameAs\":[\"https:\/\/www.lawteacher.net\",\"https:\/\/www.facebook.com\/LawTeacherNet\",\"https:\/\/x.com\/LawTeacherNet\",\"https:\/\/gravatar.com\/lawteacherprofile\"],\"knowsAbout\":[\"Contract Law\",\"Criminal Law\",\"Constitutional and Administrative Law\",\"EU Law\",\"Tort Law\",\"Property Law\",\"Equity and Trusts\",\"Jurisprudence\",\"Company Law\",\"Commercial Law\",\"Family Law\",\"Human Rights Law\",\"Employment Law\",\"Evidence\",\"Public International Law\",\"Legal Research and Methods\",\"Dispute Resolution\",\"Business Law and Practice\",\"Civil Litigation\",\"Criminal Litigation\",\"Professional Conduct\",\"Taxation\",\"Wills and Administration of Estates\",\"Solicitors\u2019 Accounts\"],\"url\":\"https:\/\/www.lawteacher.net\/author\/lawteacher\"}]}<\/script>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"RTS Flexible Systems Ltd v Molkerei | LawTeacher.net","description":"The claimant was a supplier of automated machines and agreed to manufacture an automated system in the defendant\u2019s factory. Work began on the basis of a letter of intent with a long form contract to follow.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.lawteacher.net\/cases\/rts-flexible-systems-v-molkerei.php","og_locale":"en_GB","og_type":"article","og_title":"RTS Flexible Systems Ltd v Molkerei","og_description":"The claimant was a supplier of automated machines and agreed to manufacture an automated system in the defendant\u2019s factory. Work began on the basis of a letter of intent with a long form contract to follow.","og_url":"https:\/\/www.lawteacher.net\/cases\/rts-flexible-systems-v-molkerei.php","og_site_name":"LawTeacher.net","article_publisher":"https:\/\/www.facebook.com\/LawTeacherNet\/","article_author":"https:\/\/www.facebook.com\/LawTeacherNet","article_published_time":"-0001-11-30T00:00:00+00:00","og_image":[{"width":1920,"height":1080,"url":"https:\/\/www.lawteacher.net\/wp-content\/uploads\/2025\/07\/LT-large-logo.webp","type":"image\/webp"}],"author":"LawTeacher","twitter_card":"summary_large_image","twitter_creator":"@LawTeacherNet","twitter_site":"@LawTeacherNet","twitter_misc":{"Written by":"LawTeacher","Estimated reading time":"2 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"ScholarlyArticle","@id":"http:\/\/64.226.118.242:8001\/cases\/rts-flexible-systems-v-molkerei.php#article","isPartOf":{"@id":"http:\/\/64.226.118.242:8001\/cases\/rts-flexible-systems-v-molkerei.php"},"author":{"name":"LawTeacher","@id":"https:\/\/wp.lawteacher.net\/#\/schema\/person\/b99962c073c877c4ab8ee3d2486cd56e"},"headline":"RTS Flexible Systems Ltd v Molkerei","datePublished":"-0001-11-30T00:00:00+00:00","mainEntityOfPage":{"@id":"http:\/\/64.226.118.242:8001\/cases\/rts-flexible-systems-v-molkerei.php"},"wordCount":315,"publisher":{"@id":"https:\/\/wp.lawteacher.net\/#organization"},"keywords":["UK Law"],"articleSection":["Case Summaries"],"inLanguage":"en-GB"},{"@type":"WebPage","@id":"http:\/\/64.226.118.242:8001\/cases\/rts-flexible-systems-v-molkerei.php","url":"http:\/\/64.226.118.242:8001\/cases\/rts-flexible-systems-v-molkerei.php","name":"RTS Flexible Systems Ltd v Molkerei | LawTeacher.net","isPartOf":{"@id":"https:\/\/wp.lawteacher.net\/#website"},"datePublished":"-0001-11-30T00:00:00+00:00","description":"The claimant was a supplier of automated machines and agreed to manufacture an automated system in the defendant\u2019s factory. Work began on the basis of a letter of intent with a long form contract to follow.","breadcrumb":{"@id":"http:\/\/64.226.118.242:8001\/cases\/rts-flexible-systems-v-molkerei.php#breadcrumb"},"inLanguage":"en-GB","potentialAction":[{"@type":"ReadAction","target":["http:\/\/64.226.118.242:8001\/cases\/rts-flexible-systems-v-molkerei.php"]}]},{"@type":"BreadcrumbList","@id":"http:\/\/64.226.118.242:8001\/cases\/rts-flexible-systems-v-molkerei.php#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/wp.lawteacher.net\/"},{"@type":"ListItem","position":2,"name":"RTS Flexible Systems Ltd v Molkerei"}]},{"@type":"WebSite","@id":"https:\/\/wp.lawteacher.net\/#website","url":"https:\/\/wp.lawteacher.net\/","name":"Law Teacher","description":"The Law Essay Professionals","publisher":{"@id":"https:\/\/wp.lawteacher.net\/#organization"},"alternateName":"LawTeacher.net","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/wp.lawteacher.net\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-GB"},{"@type":"Organization","@id":"https:\/\/wp.lawteacher.net\/#organization","name":"Law Teacher","alternateName":"LawTeacher.net","url":"https:\/\/wp.lawteacher.net\/","logo":{"@type":"ImageObject","inLanguage":"en-GB","@id":"https:\/\/wp.lawteacher.net\/#\/schema\/logo\/image\/","url":"https:\/\/www.lawteacher.net\/wp-content\/uploads\/2025\/07\/LT-logo.jpg","contentUrl":"https:\/\/www.lawteacher.net\/wp-content\/uploads\/2025\/07\/LT-logo.jpg","width":250,"height":250,"caption":"Law Teacher"},"image":{"@id":"https:\/\/wp.lawteacher.net\/#\/schema\/logo\/image\/"},"sameAs":["https:\/\/www.facebook.com\/LawTeacherNet\/","https:\/\/x.com\/LawTeacherNet","https:\/\/api.whatsapp.com\/send\/?phone=447723491966&text&type=phone_number&app_absent=0"],"description":"Law Teacher provides academic writing services for law students throughout the world.","email":"contact@lawteacher.net","telephone":"+44 115 966 7966","numberOfEmployees":{"@type":"QuantitativeValue","minValue":"51","maxValue":"200"}},{"@type":"Person","@id":"https:\/\/wp.lawteacher.net\/#\/schema\/person\/b99962c073c877c4ab8ee3d2486cd56e","name":"LawTeacher","image":{"@type":"ImageObject","inLanguage":"en-GB","@id":"https:\/\/wp.lawteacher.net\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/4fdfab0a9ef25209f111018ecc8a983e19e57c5066a9277217a119582ccbeed3?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/4fdfab0a9ef25209f111018ecc8a983e19e57c5066a9277217a119582ccbeed3?s=96&d=mm&r=g","caption":"LawTeacher"},"description":"LawTeacher.net is the UK's leading provider of academic legal support, offering both writing services and an extensive collection of law study resources for students in the UK and overseas. Founded in 2003 by Grey's Inn graduate Barclay Littlewood, the Company was built on a commitment to excellence, with unique guarantees and a high standard of service from day one. The team includes over 500 UK legally qualified writing experts, with many practising solicitors and barristers, and several former lecturers.","sameAs":["https:\/\/www.lawteacher.net","https:\/\/www.facebook.com\/LawTeacherNet","https:\/\/x.com\/LawTeacherNet","https:\/\/gravatar.com\/lawteacherprofile"],"knowsAbout":["Contract Law","Criminal Law","Constitutional and Administrative Law","EU Law","Tort Law","Property Law","Equity and Trusts","Jurisprudence","Company Law","Commercial Law","Family Law","Human Rights Law","Employment Law","Evidence","Public International Law","Legal Research and Methods","Dispute Resolution","Business Law and Practice","Civil Litigation","Criminal Litigation","Professional Conduct","Taxation","Wills and Administration of Estates","Solicitors\u2019 Accounts"],"url":"https:\/\/www.lawteacher.net\/author\/lawteacher"}]}},"_links":{"self":[{"href":"https:\/\/www.lawteacher.net\/wp-json\/wp\/v2\/posts\/6433","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.lawteacher.net\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.lawteacher.net\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.lawteacher.net\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.lawteacher.net\/wp-json\/wp\/v2\/comments?post=6433"}],"version-history":[{"count":0,"href":"https:\/\/www.lawteacher.net\/wp-json\/wp\/v2\/posts\/6433\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.lawteacher.net\/wp-json\/wp\/v2\/media?parent=6433"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.lawteacher.net\/wp-json\/wp\/v2\/categories?post=6433"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.lawteacher.net\/wp-json\/wp\/v2\/tags?post=6433"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}