The recent decision of the Employment Appeal Tribunal (EAT) in Kankanalapalli v Loesche Energy Systems Ltd [2026] EAT 49 serves as an important reminder that a conditional job offer can still give rise to a binding contract. Where an offer is withdrawn incorrectly, employers may be exposed to breach of contract claims and liability for notice pay.
Background to the case
Mr Kankanalapalli (the Claimant) applied for a project manager role with the Respondent and, following interview, was offered the position on 23 September 2022. The proposed start date was 1 November 2022. The offer letter stated that employment was subject to receipt of satisfactory references, a right‑to‑work check and completion of a successful six‑month probationary period from the start date.
The Claimant accepted the offer by email on 26 September 2022. He completed new starter documentation, provided reference details and submitted right‑to‑work documents, although he did not return a signed copy of the offer letter.
On 11 October 2022, before the start date, the Respondent withdrew the offer.
The Claimant subsequently brought a breach of contract claim before the Employment Tribunal.
Employment Tribunal decision
At first instance, the Employment Tribunal dismissed the claim. It held that no binding contract had been formed because the conditions attached to the offer had not yet been satisfied. On that basis, the Tribunal concluded that the employer was entitled to withdraw the offer without notice.
The Claimant appealed to the EAT.
The EAT’s findings
The EAT overturned the Employment Tribunal’s decision. The central issue was whether the conditions in the offer letter operated as conditions precedent or conditions subsequent:
- Conditions precedent prevent a contract from coming into existence until they are satisfied.
- Conditions subsequent allow a binding contract to exist, but permit termination if the condition is not met.
On the facts of the case, the EAT found that the conditions operated as conditions subsequent. As a result, a binding contract came into existence when the Claimant accepted the offer, despite the outstanding checks.
Having found that a contract existed, the EAT concluded that withdrawing the offer amounted to a termination of that contract. As the contract did not specify a notice period, the EAT implied a term requiring reasonable notice. Given the seniority of the role, three months’ notice was held to be reasonable. By withdrawing the offer without notice, the employer was therefore in breach of contract.
Key considerations for employers
- Clarity in offer letters - offer letters should clearly state whether no contract will arise until all conditions are satisfied, or whether conditions permit termination after a contract has formed. Ambiguous drafting is likely to be interpreted against the employer.
- Seniority increases risk - where a senior candidate accepts an offer which is later withdrawn, the implied notice period may be significant, potentially requiring internal approval.
- Reputational impact - withdrawing an accepted offer without notice can attract criticism, even where the financial exposure is limited. This may cause reputational damage and undermine confidence in recruitment processes.
- Link withdrawal to the conditions - in Kankanalapalli, the withdrawal was unrelated to the conditions themselves. Where an offer is withdrawn because a condition is genuinely not satisfied (for example, an unsatisfactory DBS check), termination may be lawful. By contrast, withdrawing an offer for operational or budgetary reasons before conditions are concluded may still amount to a breach of contract. Any withdrawal should be clearly linked to the relevant condition and supported by contemporaneous records.
- Consider notice or payment in lieu - if withdrawal is unavoidable, employers should consider whether notice or a payment in lieu should be provided to mitigate contractual and reputational risk.
