Meeting of minds is essential: continuing negotiations prevented a binding charter party and left the arbitration clause unenforceable.

A concluded contract arises from correspondence only where the documents clearly show a meeting of minds on all material terms. Continued negotiation over essential conditions, including the standby letter of credit and performance guarantee, showed that the parties were not ad idem on the proposed charter party. On those facts, the unsigned draft never matured into a binding bargain, no enforceable agreement came into existence, and the arbitration clause in the draft charter party had no legal existence.

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Issues: Whether a concluded, enforceable and binding contract, including an arbitration agreement, came into existence between the parties on the basis of the unsigned charter party and the correspondence exchanged.

Analysis: The material on record showed that the parties were still negotiating essential terms, particularly the format and acceptance of the standby letter of credit and the performance guarantee. The Court held that correspondence can establish a contract only if it clearly discloses a meeting of minds on all material terms. Where the documents show continuing negotiation and unresolved fundamental conditions, the Court cannot create a contract for the parties. On the facts, the correspondence demonstrated that the parties were not ad idem and that the proposed charter party never matured into a binding concluded bargain. In the absence of acceptance of the standby letter of credit and performance guarantee, no enforceable agreement arose and the arbitration clause contained in the draft charter party could not operate.

Conclusion: No concluded, enforceable or binding contract existed between the parties, and the arbitration clause had no legal existence.

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