Key takeaways
Agreement in principle
This will not be binding and the agreement will be subject to further details.
Drafting agreements
Precise and clear language must be used to avoid disputes and confusion.
Interpretation of contracts
In a commercial context, the Court will give the words used their natural and ordinary meaning.
Kounis -v- Critchlow and Associates Ltd [2026] EWHC 693 (KB)
Most practitioners know that correspondence can end up before the Court, but this case is a sharp reminder of how a single phrase, such as 'in principle', can determine whether an agreement has been concluded at all.
Given the volume and complexity of client enquiries we continue to receive on contract formation, particularly where negotiations unfold through fragmented or informal channels, we have explored this subject in our previous articles (as linked below). This latest decision adds yet another important layer to the developing jurisprudence on contractual intention and agreement, reinforcing that the courts will analyse wording with precision and will not infer certainty where the language objectively demonstrates conditionality or hesitation.
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The background facts
Between 2012 and 2015, Mr Kounis worked as a self employed consultant for Maxwell Alves, a firm of solicitors acting for individuals pursuing claims arising from the alleged mis selling of property in Cyprus. The relationship deteriorated in 2015, leading to a dispute about his ongoing involvement with former clients.
In January 2017, Maxwell Alves sent a letter of claim requiring him to cease providing services to those clients and shortly thereafter issued injunction proceedings. These proceedings were funded by the firm’s professional indemnity insurers, AmTrust.
Mr Kounis instructed Critchlow and Associates Limited to represent him but terminated their retainer on 25 April 2017.
A settlement agreement was eventually reached on 10 October 2019 between Mr Kounis, Maxwell Alves, and AmTrust. Under it, Mr Kounis:
Agreed to pay £80,000; and
Assigned to Maxwell Alves and AmTrust his causes of action against Critchlow and Associates in respect of an alleged negligence claim (in lieu of the remaining £80,000 balance).
On 10 December 2021, the parties entered into a variation agreement. AmTrust reassigned the causes of action back to Mr Kounis and took a charge over the outstanding £80,000. If proceedings were not issued by 1 January 2023, the claim would automatically be reassigned to AmTrust.
The deadline was first extended to 1 February 2023, and then to 16 May 2023.
On 11 May 2023, Mr Kounis asked AmTrust’s solicitors for a further extension. A series of emails followed on 15 May 2023, the day before the deadline:
AmTrust’s solicitors: "Please confirm the period of the extension […] which you seek."
Mr Kounis: "[…] It will be several weeks before this round of exchanges is completed. If your client has any issue extending to say, the end of this year, I need to know now, before incurring more costs."
AmTrust’s solicitors: “Our client has no objection in principle to agreeing an extension to the assignment.”
Mr Kounis: “Thank you for your confirmation. I will let you know as soon as I get a response from the o/s.”
There was no further correspondence on this issue until October 2023, when AmTrust indicated they had no interest in retaking the assignment or pursuing the claim.
On 11 December 2023, Mr Kounis issued proceedings against Critchlow and Associates. The defendant applied to strike out the claim or for summary judgment, arguing that Mr Kounis lacked standing because the assignment had already taken effect.
Master Gidden dismissed the application on 8 April 2025, finding it arguable that the parties had agreed to extend the assignment deadline. Critchlow appealed.
The High Court decision
The central issue on appeal was whether the 15 May 2023 emails amounted to a concluded agreement extending the deadline until the end of 2023.
The Court reiterated that in a professional or commercial context, words used in correspondence must be given their ordinary and natural meaning. They cannot be rewritten or disregarded.
Applying that approach, the Court held that the phrase 'in principle' clearly indicated that:
Any agreement was subject to further details, and
No final or binding commitment had been reached.
Accordingly, the Court found:
The Master erred in his analysis of the 15 May 2023 correspondence.
No concluded agreement was formed before the deadline.
The October 2023 exchanges did not vary the original arrangement because both parties assumed no variation was necessary.
The cause of action therefore vested in AmTrust, leaving Mr Kounis without standing.
However, rather than striking out the proceedings immediately, the Court stayed the claim and allowed Mr Kounis a fixed period in which to apply to join AmTrust as a party. If he failed to do so, the claim would be struck out.
Comment
This case highlights the impact that imprecise or provisional language can have in contractual negotiations. The May 2023 correspondence shows the importance of obtaining clear, unequivocal agreement where rights turn on strict deadlines. The High Court found that AmTrust’s statement that it had 'no objection in principle' to an extension was not a binding commitment, but merely an indication of possible agreement. Without explicit confirmation, the assignment deadline expired, the cause of action reverted to AmTrust, and Mr Kounis was left without standing.
The decision serves as a reminder that parties cannot rely on assumptions, informal wording, or the tone of communications when the legal consequences are significant. Where time‑sensitive rights are involved, parties should insist on express written confirmation, follow up promptly if clarity is lacking, and issue protective proceedings where necessary. Had firm agreement been secured - or protective steps taken - this dispute over standing might have been avoided. Ultimately, the case reinforces a familiar principle: in contract formation and variation, precision matters, and even a single ambiguous phrase can determine the outcome of litigation.
