Tesco v Constain - Thomson Reuters

1990 S.L.T. 249 Page 41989 WL 984342 (OH), 1990 S.C.L.R. 186(Cite as: 1990 S.L.T. 249)Textbooks referred toBell, Principles (10th ed.), s. 26.Craigie, Conveyancing (3rd ed.), pp. 246-248.Gloag, Contract (2nd ed.), pp. 37 and 39.McBryde, Contract, paras. 5-86 et seq.On 27 July 1989 the Lord Ordinary repelled the pursuers' pleas in law,sustained the defenders' first plea in law and dismissed the action.LORD CAPLAN.[After the narrative quoted supra his Lordship continued:]In their pleadings the pursuers plead that the said correspondence amounts to aconcluded and effective bargain. They further plead that esto the said contractis improbative it has been validated by rei interventus and homologation. Bothparties have preliminary pleas attacking the relevancy of each other's pleadings.At the procedure roll hearing it was contended on behalf of the defenders thata qualified acceptance of an offer is in effect a counter offer (Craigie,Conveyancing (3rd ed.), pp. 246-248). If an offer is met by anything less than aclear acceptance then such acceptance can be ignored -- Johnston v. Clark. Theeffect of a refusal of an offer is that the offer lapses and a counter offer isin fact a refusal. I was referred to Gloag on Contract (2nd ed.), pp. 37 and 39,Uniroyal v. Miller & Co. Ltd., and Wolf and Wolf v. Forfar Potato Co. Counselalso discussed the cases referred to by Gloag at p. 37, namely Hunter v.Huntersand Hyde v. Wrench. It was also claimed that the letter dated 11 January1989 from the pursuers' solicitors concluded nothing since by that stage therewas nothing to accept. In any event, the offer constituted by the letter of 29September would have lapsed. Mere negotiations will not be sufficient to keep anoffer open if the offer would otherwise expire. I was referred to Glasgow etc.Steam Shipping Co. v. Watson . I was further referred to the classic definitionof rei interventus in Bell's Principles, s. 26 and it was argued that it wascritical that the actings be "not unimportant" . The actings relied on by thepursuers, namely the preparation of a draft disposition and the preparation andrevisal of standard forms, were not of sufficient importance to set up a casebased on rei interventus. I was also referred to Mitchell v. The StornowayTrustees . It was argued that there was no concluded informal agreement whichcould be homologated (Law v. Thomson ). Finally, I was referred to Heiton v.Waverley Hydropathic Co. as an illustration of actings considered to be tootrivial to be the basis of rei interventus.For the pursuers it was contended that the letter from their solicitors of 11January 1989 concluded a formal contract. In so far as the defenders' qualifiedacceptance of 29 September 1988 was to be regarded as an offer, time was not ofits essence. The view that a qualified acceptance had the effect of nullifyingthe offer it related to was based on doubtful authority and in any event was toobroadly stated. Missives in commercial negotiations should be regarded as anevolutionary process where offers and counter offers are constantly *252 beingmodified and adjusted as negotiations progressed. In the present case, therelevant correspondence was part of a lengthy and complicated negotiationprocess. Even if a qualified acceptance should be regarded as a refusal of therelevant offer that rule would only apply if the qualifications related toessential conditions so that the qualified acceptance could be regarded as acompletely new offer. With regard to inessential conditions it is more correct toregard such qualifications as proposals for modification of the offer rather thanas a refusal of the offer. I was referred to McBryde, The Law of Contract, paras.5-86 et seq. The cases founded on by Professor Gloag at p. 37, namely Hunter v.Hunters and Hyde v. Wrench , are doubtful support for the views the authorCopr. © West 2004 No Claim to Orig. Govt. Works