By sending an offer letter to a potential new employee, even with conditions included, an employer may already have entered into a contract, and potentially an employment contract, with that individual. 

One issue employers often find problematic in practice is the confusion surrounding contract law. 

It might be assumed that sending an offer letter is simply that, an offer, rather than a contract in its own right. However, the reality is more complicated. Whether an offer letter amounts to a legally binding contract can depend just as much on the surrounding circumstances as it does on the wording of the letter itself. 

The Employment Appeal Tribunal recently considered this issue in Kankanalapalli v. Loesche Energy Systems Ltd [2026] EAT 49 (20 January 2026). 

What Happened in This Employment Law Case?

After a formal interview process, a candidate was offered a role with a proposed start date just under two months later. 

He was asked to sign and return the offer letter. Following further email discussions, particularly regarding relocation expenses as he was moving from overseas, the candidate confirmed in writing: 

“Please take it that I accept the offer.” 

Although he did not physically sign and return the offer letter, he clearly communicated acceptance.  He was also provided with: 

• A reference form 
• A new starter information form 

The references form included the statement:  “I understand that my employment may be terminated without the provision of satisfactory references.”

Conditions Attached to the Job Offer

The offer was stated to be subject to several standard employment conditions: 

• Completion of right to work checks 
• Receipt of satisfactory references 
• Successful completion of a six-month probationary period 

However, complications arose when the employer attempted to change the agreed start date. The candidate, having already booked flights to the UK, queried how he would be paid during the delay. 

The employer then withdrew the offer. 

Although initial right-to-work checks had begun, references had not yet been obtained, despite the candidate providing the necessary information. 

The candidate brought a claim for breach of contract, arguing that he had not received proper notice. 

Was the Offer Letter a Legally Binding Contract?

Yes. 

Despite the inclusion of conditions, the Employment Appeal Tribunal found that a binding contract had been formed. 

The important issue was not simply the presence of conditions, but when those conditions were intended to take effect. 

Why the Tribunal Found a Contract Existed

The surrounding correspondence demonstrated that: 

• The conditions were intended to operate after acceptance, not before 
• Certain requirements, such as the probationary period, could only occur once employment had begun 
• Right to work checks and references were framed as ongoing employment conditions, not pre-contract requirements 

Perhaps most significantly, the offer letter itself contained many of the essential terms of employment, including: 

• Start date 
• Salary 
• Working hours 
• Job description 
• Holiday entitlement 
• Bonus and pension details 

In addition, the employer had already taken steps to onboard the employee, including: 

• Providing pre-employment documentation 
• Arranging a security pass 

Taken together, these actions demonstrated a clear intention to create a binding employment relationship. 

The Tribunal therefore concluded that the job offer was a contract in its own right, and that withdrawing it amounted to a breach of contract. 

What Was the Legal Consequence for the Employer?

The offer letter did not specify a notice period.  However, given the circumstances, the Tribunal determined that more than the statutory minimum notice was required. 

Factors Considered in Determining Notice

The Tribunal took into account: 

• The lengthy recruitment process 
• The seniority of the role 
• The six-month probationary period 
• The employee’s international relocation 
• The employer’s suggestion that the employee rent a property for 12 months 

Based on industry standards, a three-month notice period was deemed appropriate, and the employee was awarded pay accordingly. 

What the Employee Was Not Entitled To

Because the employment had not yet commenced: 

• No holiday pay was awarded 
• No relocation expenses were payable 

However, the Tribunal noted that, had further expenses been incurred or additional terms agreed, the financial consequences for the employer could have been significantly greater. 

Employment Law Lessons for Employers

This case serves as a cautionary tale for employers, HR professionals, and directors involved in recruitment. 

Job offers are essential documents in the employment relationship, but they can also create unintended legal risk. 

Why Offer Letters Can Be Risky

The risks arise not only from what is written in the offer letter, but also from: 

• Email correspondence 
• Verbal assurances 
• Onboarding actions taken before a formal contract is signed 

In this case, the Tribunal found that: 

• Certain conditions could only logically apply after a contract existed 
• The employer’s conduct demonstrated a clear intention to employ the individual 

Practical Takeaways for UK Employers

Employers should ensure that: 

• Offer letters are carefully drafted with clear conditional wording 
• It is explicitly stated when a contract becomes binding 
• Pre-employment conditions are clearly distinguished from post-acceptance obligations 
• Internal processes and communications do not contradict the written terms 

Final Comment

As this case highlights, employment offer letters are not merely administrative documents. In the context of UK employment law, they can create binding contractual obligations sooner than many employers expect. 

Employers must take care not only to ensure that their employment documentation is robust and legally compliant, but also that their actions and communications during the recruitment and onboarding process do not inadvertently create legal liability. 

A cautious and consistent approach can help avoid costly disputes and protect the business from unintended contractual obligations. If you are after clarity regarding employment letters or other aspects of UK employment law, then get in touch with Richard Hiron via r.hiron@woodstocklegalservices.co.uk or by completing the form below.