Commercial law – Heads of Terms and Joint Ventures and Spitfires!
This was an interesting case involving hidden treasure and “memorandums of understanding” or “letters of intent” or “heads of agreement” or “heads of terms” (as they are all sometimes confusingly called) and confidential information !
The “treasure” in this case was some 60 English spitfire warplanes that had been buried following the end of the Second World War in Burma. With the war at an end, the British authorities did not want to leave recently delivered spitfire aircraft (still in their shipping crates) in a war torn country and neither did they want the expense of shipping them back home so they decided to bury them in their packing crates (with all metal parts being heavily greased) and they have remained there to this day in perfect condition – astonishingly, the value of these planes in the current market would run into the many tens of millions of Euros.
A Mr. David Cundall of the UK spent many years (and a lot of money) searching for these planes in February this year he was certain that he had found their location – however, the problem was that Mr. Cundall had run out of money and needed at least half a million pounds to continue the work.
In and around March/April of this year Mr. Cundall was introduced to another spitfire lover (a Mr. Brooks) who was interested in investing money into the hunt and a heads of agreement was presented to Mr. Cundall – from this point on it seems that the parties had differing views on how matters were to proceed. Mr. Brooks went off to Burma, meeting with David Cameron and even took a ride home on the Government jet whilst Mr. Cundall claims he did not even know that Mr. Brooks was out in Burma ! Mr. Cundall was allegedly angry because he considered that he was pushed off the team whilst Mr. Brooks allegedly claimed that the memorandum did not represent a contract. Allegedly, it is said that Mr. Brooks commented further that “we cannot understand how this wonderful situation is turning into such a ridiculous situation” whilst Mr. Cundall apparently claimed that the terms of the memorandum of understanding were “an insult”.
So, how did something that was unique and inspirational suddenly spiral into such an unfortunate shambles? Well, here at Reilly & Co, Solicitors we see business people entering into business relationships every day of the week and many times they have put together heads of agreement themselves which are of very bad quality and poorly drafted – these heads of agreement are then used as the basis of the deal going forward with both sides not having any real form of clarity or agreement on what each side is or is not supposed to do – as was clearly the case with Mr. Cundall and Mr. Brooks – in this case it seems that Mr. Brooks wished to proceed with his own recovery operation without Mr. Cundall who has allegedly claimed that Mr. Brooks was in possession of his confidential information which Mr. Brooks denies – meanwhile, Mr. Brooks has claimed that he simply wants to “keep the project on the road” and is making his own investigations on the whereabouts of the buried treasure.
A properly drafted heads of agreement would more than likely have prevented all of the above problems from developing as they would have set out both sides duties and obligations and also deal with the use of confidential information and other matters of concern between the parties – it would have also made it clear whether it was legally binding or not.
In an interesting (yet not unexpected) twist to the tale it seems that the latest news on this treasure hunters trail is that there was a race to find the planes between the parties and that Mr. Cundall found another investor (a Burmese one this time) and according to the Burmese press Mr. Cundall and his business partner have already signed a deal to excavate the planes with the Burmese government – it is never dull in the commercial world.
We can only think that Mr. Brooks would have benefited from a properly drafted heads of agreement from Reilly & Co, Solicitors (and would have relished the chance to draw up the contract with the Burmese investor) !
If you are entering into a joint venture with a third party then please call us for a no obligation chat on how we can assist you on drafting or reviewing heads of terms and generally: Contact us on 023 88 21919 or by email on email@example.com