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England and Wales High Court (Technology and Construction Court) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Technology and Construction Court) Decisions >> Transformers & Rectifiers Ltd v Needs Ltd  EWHC 269 (TCC) (13 February 2015)
Cite as:  EWHC 269 (TCC),  TCLR 2,  BLR 336, 159 Con LR 33
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QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
Rolls Building, 7 Rolls Buildings
London EC4A 1NL
B e f o r e :
| Transformers & Rectifiers Ltd
|- and -
Ian Ridd Esq (instructed by Nockolds Solicitors Ltd) for the Defendant
Hearing dates: 11th December 2014
Crown Copyright ©
Mr. Justice Edwards-Stuart:
The course of dealing
"The quoted prices and deliveries are subject to our normal Terms and Conditions of Sale (copies available on request)"
"We hereby certify that the material detailed hereon has been inspected in accordance with the requirements of the conditions and requirements of the contract/purchase order, and unless stated otherwise conforms in all respects to the drawing(s)/specification(s) relevant thereto."
"... I consider that reasonable notice of the terms was given by the plaintiffs. Putting it another way, I consider that the defendant's conduct in continuing the course of business after at least 11 notices of the terms and omitting to request a sight of them would have led and did lead the plaintiffs reasonably to believe the defendants accepted their terms. In those circumstances it is irrelevant that in fact [the managing director] did not read the notices."
"Whether or not one party's standard terms are incorporated depends on whether that which each party says and does is such as to lead a reasonable person in their position to believe that those terms were to govern their legal relations. The Court has to determine what each party was reasonably entitled to conclude from the acts and words of the other ... The question is one of fact to which prior authority may form an uncertain guide."
"Please supply the following subject to the terms and conditions as set out below and overleaf."
The purchase order was sent by fax, so that there were no terms and conditions "overleaf", but instead the order was sent as two separate pages, expressly identified as "Page 1 of 2" and "Page 2 of 2". Page 2 consisted of the terms and conditions.
"This appeal raises the question whether in what is sometimes called 'the battle of forms', there can be circumstances in which a traditional offer and acceptance analysis can be displaced by reference to the conduct of the parties over a long-term relationship. An offer to buy containing the purchaser's terms which is followed by an acknowledgement of purchase containing the seller's terms which is followed by delivery will (other things being equal) result in a contract on the seller's terms. If, however, it is clear that the neither party ever intended the seller's terms to apply and always intended the purchaser's terms to apply, it is conceptually possible to arrive at the conclusion that the purchaser's terms are to apply. It will be a rare case where that happens. Do the facts of this appeal amount to that rare case?"
"The judge found that Amphenol acknowledged the purchase orders by sending an acknowledgment to Tekdata. In law it could only be at that date at earliest that a contract for the purchase and sale of the specified connectors came into existence. The acknowledgment, however, stated that Amphenol's terms and conditions were to apply and the traditional view would be that, if no further documentation passed between the parties and if Tekdata took delivery of the connectors, the contract would be on the terms of Amphenol's acknowledgement. The judge, however, held that it was never intended that Amphenol's terms should apply because the parties had always intended that Tekdata's terms were to apply. He seems to have concluded, although he did not expressly say so, that the clause (at the bottom right hand corner of the acknowledgement) about the application of Amphenol's terms was to be ignored and that the contract came into existence when the acknowledgment was returned to Tekdata."
"... it is not possible to lay down a general rule that will apply in all cases where there is a battle of the forms. It always depends on an assessment of what the parties must objectively be taken to have intended. But where the facts are no more complicated than that A makes an offer on its conditions and B accepts that offer on its conditions and, without more, performance follows, it seems to me that the correct analysis is what Longmore LJ has described as the 'traditional offer and acceptance analysis', ie that there is a contract on B's conditions."
"In my judgment these facts are right on the borderline. If there had been any persuasive evidence, either that the terms of Contract 1/04 were the usual terms on which grain merchants purchase grain from UK producers, or that Mr. Capes knew that grain merchants commonly employed standard terms which provided for disputes to be settled by arbitration, I would have been likely to hold that Contract 1/04 was incorporated. In the absence of such evidence, I do not think that the previous contracts justify the conclusion that the AIC terms were incorporated. To put it another way, the limited course of dealing between the parties is not in my view such that an impartial observer would conclude that the parties had reached a common understanding that Contract 1/04 applied."
The submissions of the parties
"… a document signed by a Director or other duly authorised officer of the Company ... and no other servant or agent has any authority to alter or qualified these conditions in any way."
i) Where A makes an offer on its conditions and B accepts that offer on its conditions and, without more, performance follows, the correct analysis, assuming that each party's conditions have been reasonably drawn to the attention of the other, is that there is a contract on B's conditions: see Tekdata.
ii) Where there is reliance on a previous course of dealing it does not have to be extensive. Three or four occasions over a relatively short period may suffice: see Balmoral at  and Capes (Hatherden).
iii) The course of dealing by the party contending that its terms and conditions are incorporated has to be consistent and unequivocal: see Sterling Hydraulics.
iv) Where trade or industry standard terms exist for the type of transaction in question, it will usually be easier for a party contending for those conditions to persuade the court that they should be incorporated, provided that reasonable notice of the application of the terms has been given: see Circle Freight.
v) A party's standard terms and conditions will not be incorporated unless that party has given the other party reasonable notice of those terms and conditions: see Circle Freight.
vi) It is not always necessary for a party's terms and conditions to be included or referred to in the documents forming the contract; it may be sufficient if they are clearly contained in or referred to in invoices sent subsequently: see Balmoral at , .
vii) By contrast, an invoice following a concluded contract effected by a clear offer on standard terms which are accepted, even if only by delivery, will or may be too late: see Balmoral at .