Tesco v Constain - Thomson Reuters

1984 S.L.T. 100 Page 81983 WL 217320 (2 Div)(Cite as: 1984 S.L.T. 100)not disputed by the latter that there were material conditions put forward in 6/2-- particularly on the date of shipping and the split- grading -- which rendered6/2 a new offer rather than an acceptance of 6/1. This new offer was not acceptedin the course of the telephone call.The pursuers argued that the effect of 6/3 was to withdraw the qualifications,or counter-offer, in 6/2, and to accept simpliciter the offer in 6/1. They wereentitled to do so within the time limit set in 6/1.In my opinion this argument fails, for two basic reasons, videlicet:(1) The wording of the first paragraph in 6/3 indicates clearly, in my opinion,that Mr Wolf at that time understood that the offer in 6/1 had already beenaccepted; 6/3 was being sent simply to "confirm that we have accepted your offer". This accords with the previously expressed view that 6/2 was an acceptance of6/1 and the telephone conversation had affirmed that an agreement had beenreached. The defenders on the other hand did not agree that any such agreementhad been *106 reached. If it had been intended that 6/3 should withdraw thecounter-offer in 6/2 and accept 6/1 simpliciter it would have been simple to doso in 6/3. I agree entirely with the reasoning of the sheriff to the effect that6/3 did not constitute a withdrawal of the counter-offer put forward in 6/2, andthat no consensus in idem between the parties was reached by the sending of 6/3.Once it is conceded that 6/2 constituted a counter- offer, an acceptance by thedefenders to the terms of that counter-offer was necessary to complete acontract. Such an acceptance was never given. Nor did 6/3 indicate that thecounter-offer had been withdrawn. As senior counsel for the defenders put it inan apt phrase:"6/3 was only an inaccurate record of an agreement which had never beenentered into".(2) It was argued on behalf of the pursuers that as 6/1 gave them a time- limitbefore which they were entitled to accept the terms set out in 6/1, they wereentitled to accept that offer at any time before the time-limit expired: thisapplied as a rule of law even although in the meantime they had rejected theoffer in 6/1 and proposed a new offer. If that were withdrawn later, they werestill entitled to accept the original offer in 6/1, which remained in existenceuntil the expiry of the time-limit. This is what they had done in 6/3.In my opinion this argument is unsound. If, as is admitted, 6/2 was a refusalof the offer contained in 6/1, and was a new offer (which was never accepted),the legal effect is that the original offer in 6/1 disappeared. The time-limitwas part of that offer and with its refusal that condition fell along with allthe other conditions of that offer. See Gloag on Contract (2nd ed., p. 37), wherethe learned author says: "An offer falls if it is refused. If the refusal is notperemptory, but combined with a request for better terms, the generalconstruction is that the offer is gone, and that the party to whom it was made,on failure to obtain the terms he requests, cannot fall back on an acceptance ofthe original offer". This passage in my opinion sets out the law on this matter,and seems to me with respect to be in accordance with common sense (see Hunter v.Hunters; Hyde v. Wrench ).In my opinion the sheriff's conclusion that no consensus in idem and nocontract was ever reached between the parties was correct upon his findings, andI would refuse the appeal.Much time was consumed at the hearing of the appeal upon the question ofdamages, but in view of my clear opinion that the pursuers fail upon the primaryquestion I do not think it necessary to deal with damages at all, beyond sayingthat I am inclined to agree with the views of your Lordship in the chair upondamages and if I had reached the subject would have measured damages at10,000.On the whole matter I agree that the appeal should be dealt with as indicatedby your Lordship.Lord McDonald.Copr. © West 2004 No Claim to Orig. Govt. Works