Contract Law: Case Study #1 Butler Machine Tool Co. v. Ex Cell-O Coporation (1979)
Facts of the case:
The plantiff offered a new machinery for the price of £75,535.The delivery of the tools were set for 10 months. The conditions that orders only qualifies as accepted once the terms in the quotation were met and prevailed over any of the buyer's terms. The contract terms had included a price variation clause. The buyer responded with their own terms and conditions which do not include the 'price variation clause' listed in the plantiff's terms. This included a response section which required a signature and to be returned in order to accept the order. The sellers returned the response slip with a cover letter signalling the delivery would be in accordance with their original quotation.The tool was ready for delivery but the buyers could not accept delivery, for which the sellers increased the price which was in line with their initial terms. This was denied by the buyer and an action was brought by the seller to claim the cost of delay and interest.
Issue:
The court at the first instance found in favour of the sellers and ordered for the buyers to pay the increased cost. The buyers appealed this decision. In the appeal, it was important for the court to establish at which point, and on which party’s terms the contract had been constructed.
Held:
The court allowed the buyer’s appeal. The court found that the buyer’s order was not an acceptance of the initial offer from the seller but a counter-offer which the sellers had accepted by returning the signature section of the buyer’s letter. On this basis, the court found that the contract was completed without the price variation clause and therefore the seller could not increase the cost of the tool.
https://www.lawteacher.net/cases/butler-machine-tool-v-ex-cell-o.php
The plantiff offered a new machinery for the price of £75,535.The delivery of the tools were set for 10 months. The conditions that orders only qualifies as accepted once the terms in the quotation were met and prevailed over any of the buyer's terms. The contract terms had included a price variation clause. The buyer responded with their own terms and conditions which do not include the 'price variation clause' listed in the plantiff's terms. This included a response section which required a signature and to be returned in order to accept the order. The sellers returned the response slip with a cover letter signalling the delivery would be in accordance with their original quotation.The tool was ready for delivery but the buyers could not accept delivery, for which the sellers increased the price which was in line with their initial terms. This was denied by the buyer and an action was brought by the seller to claim the cost of delay and interest.
Issue:
The court at the first instance found in favour of the sellers and ordered for the buyers to pay the increased cost. The buyers appealed this decision. In the appeal, it was important for the court to establish at which point, and on which party’s terms the contract had been constructed.
Held:
The court allowed the buyer’s appeal. The court found that the buyer’s order was not an acceptance of the initial offer from the seller but a counter-offer which the sellers had accepted by returning the signature section of the buyer’s letter. On this basis, the court found that the contract was completed without the price variation clause and therefore the seller could not increase the cost of the tool.
https://www.lawteacher.net/cases/butler-machine-tool-v-ex-cell-o.php
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