Standard terms and conditions were not incorporated in the Contract- They were too late
Baillie Estates bought a large printing machine from Du Point, which was delivered in January 2007. Baillie complained that there were problems with the machine from the outset. In the present action, apart from a declaration as to the quality of the machine, Baillie also sought a declaration that the terms and conditions of sale which had been sent to them by e-mail were not incorporated into the parties’ contract because they had been sent too late because the parties had concluded a binding contract before 20th November 2006. There had been a good deal of correspondence between the parties about price, culminating in an e-mail on 16 November 2006, in which Du Point’s Mr. Lewis offered to supply the machine at £112,000. The e-mail contained a detailed specification of what was to be provided, plus a monthly payment schedule, and concluded:
"Target installation date: 4 December 2006 (to be confirmed following survey)".
Baillie’s Mr. Minto had e-mailed back,“Go ahead”.
Mr. Lewis had visited the site the next day and had inspected the machine’s proposed location, and said that an engineer would be sent to inspect it. He also e-mailed Mr. Minto the company’s standard terms and conditions, noting that they were also reproduced on the back of all the company’s invoices.
Baillie’s position was that as at 20 November 2006, there was no concluded contract because two conditions had not been satisfied: there had been no satisfactory site survey and there had been no completed credit check on them. They maintained that a contract had been concluded during the e-mail exchange between Mr. Lewis and Mr. Minto which had included all, or, at the latest, when Mr. Lewis had e-mailed “it’s on the way” on 19 November.
In the court’s view, there had been nothing ambiguous or informal about the proposal made by Mr. Lewis, and although Mr. Minto’s response –“go ahead”- had been brief, it was unambiguous, and apt. There was no requirement that the language of contract should be formal. Many contracts were concluded in such an informal way, particularly after detailed discussion and negotiation had taken place. The parties’ communications of 17 November were therefore capable of concluding an unconditional contract, and must also be held to have been intended to do so.
None of the e-mails contained anything about the terms and conditions being qualified by reference to any standard terms and conditions, or that the conclusion of the contract was conditional upon obtaining a site survey or credit check.
Du Point had provided their standard terms and conditions too late. They could only form part of a contract by virtue of silence and acquiescence when it has been proposed that they should be part of the contract before the contract is concluded. In the present case, the deal had been struck and the terms already agreed. In addition, some of Du Point’s standard terms conflicted with some of the terms in their proposal. Consequently, Du Point’s terms were not incorporated.
Author: Ann Glacki
Date: January 2010
Commentary
All too often parties do not enter into a single written agreement signed by them both but rather the agreement is formed through the exchange of letters or by one party making an offer and the other accepting that offer by way of its conduct.
It must be remembered that for a contract to be formed there must be an offer and an acceptance.
With regards to written acceptance whilst it must be unequivocal, it need not be in any particular words and, as in the case, simply asking the other party to “go ahead” is likely to be enough.
Similarly a party commencing work following receipt of an offer in the form of an order, or allowing a party to commence works on site following receipt of a quotation, save for intermediate counteroffers, are likely to constitute an acceptance resulting in the formation of a contract.
Author: Richard Silver
Date: February 2010
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