Brogden and others v Metropolitan Railway Co. [1877]
Facts of the case The defendants had been supplying coal to the plaintiffs since 1870. On November 1871, there was a suggestion by the defendants to increase the price of the coal and to enter a new contract. On 19 December 1871, at a meeting, the plaintiffs handed to defendants a draft contract. The draft contract also contained the blank spaces for date and the name of the arbitrator. The defendants that filled the gaps with small changes and signed the draft contract. On 21 December 1871, the defendants’ agent returned the contract to the plaintiffs with the a letter which states that ‘ if you have anything further to communicate letters addressed to “Tondu” will find me’. This reached the defendants’ office and placed in the drawer which is used for storing contracts. It remained until a dispute arose on 7th November 1872. During 1872, from the date of the commencement of the draft contract which was 1 January 1872 the plaintiffs supplied coal to defendants at the new price as specified in the draft contract often up to but not exceeding 350 tons per week, which was the max authorized by the draft contract. Lord Cairns LC commented based on the various letters which passed between the plaintiffs and defendants ‘ having read with great care the whole of this correspondence, there appears to me clearly to be pervading the whole of its the expression of a feeling on one side and on the other that those who were ordering the coals were ordering them and those who were supplying them, under some course of dealing which created on the one side a right to give order an obligation to comply with the order’ However, the plaintiffs argued that in the absence of the acceptance by defendants of the plaintiff’s offer, there was no contract. Held The was a binding contract based on the terms of the uncompleted draft in the plaintiffs’ drawer. Per Lord Cairn’s ‘there having been clearly a consensus between these parties, arrived at and expressed by the document signed by the defendants subject only to approbation, on the part of the company of the additional term… With regards to an arbitrator, that approbation was clearly given when the company commenced a course of dealing which is referable in my mind only to the contract, and when that course of dealing was accepted and acted upon by the defendants in the supply of the coals’. Per Lord Hatherley ‘ the agreement was complete when the first coals …were invoiced at the differing price and when the differing price was accepted and paid ‘. Neither plaintiffs silence in response to the defendants agent’s letter nor any mental or private acceptance would have completed the contract. Per Lord Blackburn ‘ when you come to the general proposition….that a simple acceptance in your own mind, without any intimation to the other party and expressed by a mere private act, such as putting a letter into a drawer, completes a contract, I must say I differ from that’. Conclusion A contract can be concluded by a conduct.
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