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BUTLER MACHINE TOOL V EX CELL O

General Principle:


When accepting a contract, the agreeing party accepts the terms and conditions of the offerer. This is also known as the ‘last shot’ rule or The Battle of the Forms.

Name:


Butler Machine Tool Co. Ltd v Ex Cell O Corporation Ltd [1979] WLR 401


Facts:


he sellers responded to the buyers, who were interested in purchasing a machine, by sending them a quote as to how much it would cost to supply it to them. The quote was given on the conditions that the sellers gave. These, it was written, were to be followed above any other terms and conditions that the buyers put in for their order. These clauses contained a price variation clause. The buyers made an order, but letter they sent contained a number of contradictory conditions. In particular, they did not put in a price variation clause. At the bottom of the order was a tear offer confirmation slip that had been put in on the intention of the buyer’s terms. The sellers completed this tear off confirmation slip and sent it back. The sellers then asserted that they would now be allowed to make variations to the contract price.


Ratio:


The Court of Appeal rejected this claim. Their reasoning for rejecting the claim was that the sellers had willingly and expressly accepted the buyer’s terms on the tear off slip. They had accepted the buyers “last shot”. Lord Denning stated:


“In some cases, it is decided by who gets there first. If the offeror intends to sell at a named price on the terms and conditions stated and the buyer orders the goods intending to accept the offer, if the difference is so material that it would affect the price, the buyer ought not to be allowed to take advantage of the difference unless he brings it to the attention of the seller”.



Application:


When a party communicates acceptance to an offer, he impliedly accepts the terms and conditions of the offerer.



Butler Machine Tool Co. Ltd v Ex Cell O Corporation Ltd

Analysis


The Project Manager for Camford University Property Developers plc ("CUPD") then sent a Letter of Intent by e-mail which stated:


“On behalf of my client, Camford University Property Developers plc, I hereby confirm their telephone conversation that we intend to place a contract with you for the construction of their new Academic Building all in accordance with the terms of our Invitation to Tender. Pending the preparation of a formal contract, you are authorised to immediately start work.”


This again is a sticky point. The email seems to suggest that no counteroffer has taken place over the phone and what have been reduced into writing are the original terms of the invitation tender. The email looked at objectively would suggest this contains the whole agreement (parole evidence rule) and is what is likely to be argued by CUPD along with the last shot rule as seen in battel of the forms case Butler Machine Tool Co. Ltd v Ex Cell O Corporation ltd [1979] WLR 401. However ABC may argue that the contract makes reference to a telephone conversation and terms are missing and not included in the contract. This will allow for parties to give verbal evidence in court where the contract is partly oral and in writing. This was seen in the case of Van den Esschert v Chappell [1960] WAR 114.



Butler Machine Tool v Ex Cell O

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