Trentham Ltd v Archital Luxfer Ltd [1993]
Facts of the case The claimant were the main contractors in the building of some industrial units. The defendants, subcontractors carried out some works on the windows. The claimants and defendants entered into an agreement. The terms of the agreement were negotiated in a complex process and commenced on the 12th of January 1984. The contract was concluded in the 2nd of February 1984. However there were certain things which still under negotiation such as the incorporation of the claimants’ standard of terms or defendants’ standard of terms. The negotiations were still continued until April 1984 and no agreed document was ever drafted. Claimant had started to work in February and payments from defendant began in early March. When there was a dispute , claimant argued that there was no contract. Held Steyn LJ stated that there was a contract. The reasoning was based on the case of Brogden v Metropolitan Railway where a contract can be concluded by conduct. The contemporary exchanges and carrying out of what was agreed in those exchanges support the view that there was a course of dealing which on the claimants’ side created a right to performance of the work by the defendants and on defendants’ side created a right to be paid on an agreed basics. The coincidence of offer and acceptance will in the vast majority of cases represent the mechanism of contract formation. Based on this case, the exchange correspondence alleged to have led to contract formation. However, it is not necessarily so in the case of contract, alleged to have come into existence due to performance. The judge analysed the matter in terms of offer and acceptance. The view of Steyn LJ was differed where in this case, he did not express a firm view as to whether this contract could be analysed into offer and acceptance. He considered therefore the whole correspondence approach to contract formation. It is also does not matter whether the contract came into existence after part of the work had been carried out and paid for. The conclusion is based on the fact that when the contract came into existence it impliedly governed pre contractual performance. Conclusion Contract can be concluded by conduct.
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