Side letter: Agreement to agree

In the recent case of Barbudev v Eurocom Cable Management Bulgaria EOOD and others [2011] EWHC 1560 (Comm), the Court of Appeal confirmed that a side letter was merely an agreement to agree and was evidence of an intention to create legal relations that had failed. The case concerned the sale of a cable television and internet business in Bulgaria. The sale agreement contained a condition concerning a potential investment agreement. Either party could waive that condition, but they entered into a side letter (drafted by the seller’s solicitor) setting out certain specific terms.