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Edwards v Skyways Ltd (1964)

Last modified: Thu Feb 23 16:37:37 2006

This case (Edwards v Skyways Ltd [1964] 1 WLR 349) demonstrates that if a party in a commercial agreement wishes to claim that part of the agreement is not intended to be legally binding, it has the evidential burden of proof. The assumption will always be that commercial dealings (including employer-employee) will be intended to create legal relations.

Mr Edwards, a pilot, was made redundant by Skyways. As part of the redundancy arrangements he was offered the opportunity to withdraw his contribution to the company pension scheme, or to allow it to mature and claim at 50. It was in the interests of the company that he withdraw, and they offered an ``ex-gratia'' payment to do so. In the end, however, the company refused to honour the arrangement. In its defence Skyway claimed that the use of the term ``ex-gratia'' implied that it was not intended to create legal relations. However, the court decided that this was not a strong enough argument to overturn the assumption that commercial dealings are contractual.

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