Butler Machine Tool Company Ltd v Ex-Cell-O Corporation (England) Ltd

JurisdictionEngland & Wales
CourtCourt of Appeal (Civil Division)
JudgeTHE MASTER OF THE ROLLS,LORD JUSTICE LAWTON,LORD JUSTICE BRIDGE
Judgment Date25 April 1977
Judgment citation (vLex)[1977] EWCA Civ J0425-1
Docket Number172 B. No. 234
Date25 April 1977

[1977] EWCA Civ J0425-1

In The Supreme Court of Judicature

Court of Appeal

On Appeal from the High Court of Justice

Queen's Bench Division

(Halifax District Registry)

(Mr. Justice Thesiger)

Before:

The Master of The Rolls

(Lord Denning)

Lord Justice Lawton and

Lord Justice Bridge

172 B. No. 234
The Butler Machine Tool Company Ltd
Plaintiffs
(Respondent)
and
Ex-Cell-O Corporation (England) Limited
Defendants
(Appellants)

MR. L. SCOTT (instructed by Messrs Wood, Nasl & Winters, Solicitors, London, agents for Messrs Wilkinson, Woodward & Ludlam, Solicitors, Halifax) appeared on behalf of the Plaintiffs (Respondents).

MR. J. GRIFFITHS. Q.C. and MR. R. TEDAL (instructed by Messrs. Tringhams, Solicitors, London, agents for Messrs, Harvey Ingram, Solicitors, Leicester) appeared on behalf of the Defendants (Appellants).

THE MASTER OF THE ROLLS
1

This case is a "battle of forms" The suppliers of a machine, the Butler Machine Tool Company Ltd., on the 23rd May, 1969 quoted a price for a machine tool of £75,535. Delivery was to be given in 10 months. On the back of the quotation there were terms and conditions. One of them was a price variation clause. It provided for an increase in the price if there was an increase in the costs and so forth. The machine tool was not delivered until November 1970. By that time costs had increased so much that the sellers claimed an additional sum of £2,892 as due to them under the price variation clause.

2

The buyers, Ex-Cell-O Corporation, rejected the excess charge. They relied on their own terms and conditions. They said: "We did not accept the sellers' quotation as it was. We gave an order for the self-same machine at the self-same price, but on the back of our order we had our own terms and conditions. Our terms and conditions did not contain any price variation clause".

3

The judge held that the price variation clause in the sellers' form continued through the whole dealing and so the sellers were entitled to rely upon it. He was clearly influenced by a passage in the 24th edition of Alison's Law of Contract (1975) at pages 57 and 38, of which the editor is Professor Guest; and also by Treitel on the Law of Contract, 4th Fdition (1975) at page 15' The judge said that the sellers did all that was necessary and reasonable to bring the price variation clause to the notice of the buyers. He thought that the buyers would not "browse over the conditions" of the sellers: and then, by printed words in their (the buyers') document, trap the sellers into a fixed price contract.

4

I am afraid that I cannot agree with the suggestion that the buyers "trapped" the sellers in any way. Neither party calledany oral evidence before the judge. The case was decided on the documents alone. I propose therefore to go through them.

5

On the 23rd May, 1969 the sellers offered to deliver one "Butler" double column plane-miller for the total price of£75.535 Delivery 10 months (subject to confirmation at time of ordering) "other terms and conditions are on the reverse of this quotation. On the back there were 16 conditions in small print starting with this general condition: "All orders are accepted only upon and ubject to the terms set out in our quotation and the following conditions. These terms and conditions shall prevail over any terms and conditions in the Buyer's order".

6

Clause 3 was the price variation clause. It said: "Prices are based on present day costs of manufacture and design and having regard to the delivery quoted and uncertainty as to the cost of labour, materials etc. during the period of manufacture, we regret that we have no alternative but to make it a condition of acceptance of order that goods will be charged at prices ruling upon date of delivery".

7

The buyers Ex-Cell-0 replied on the 27th May, 1969 giving an order in these words "Please supply on terms arid conditions as bolow and overleaf". Below there was a list of the goods ordered, but there were differences from the quotation of the sellers in these respects: (i) There was an additional item for the cost of installation, £100. (ii) There was a different delivery date: instead of 10 months, it was 10-11 months.

8

Overleaf there were different terms as to the cost of carriage: in that it was to be paid to the delivery address of the buyers: whereas the sellers' terms were ex warehse. There were different terms as to the right to cancel for late delivery. The buyers in their conditions reserved the right to cancel ifdelivery was not made by the agreed date: whereas the sellers in their conditions said that cancellation of order due to late delivery would not be accepted.

9

On the foot of the buyers' order there was a tear-off slip headed "acknowledgement: Please sign and return to Ex-Cell-O. We accept your order on the terms and conditions stated thereon and undertake to deliver by - Date - signed". In that slip the delivery date and signature were left blank ready to bo filled in by the sellers.

10

the 5th June, 1969 the sellers wrote this letter to the uyers: "We have pleasure in acknowledging receipt of your official order dated 27th May covering the supply of one Butler Double Column Plane-Miller. This being delivered in accordance with urn revised quotation of 23rd May for delivery in 10/11 months, i.e. March/April 1970. We return herewith duly completed your acknowledgement of order form". They enclosed the acknowledgement form duly filled in with the delivery date March/April 1970 and I signed by the Butler Machine Tool Co.

11

No doubt a contract was then concluded. But on what terms? The sellers rely on their general conditions and on their last letter which said "in accordance with our revised quotation of 23rd May" (which had on the back the price variation clause). buyers rely on the acknowledgement signed by the sellers which accepted the buyer's order "on the terms and conditions stated thereon" (which did not include a price variation clause).

12

If those documents are analysed in our traditional method, the result would seem to me to be this: The quotation of the 23rd May, 1969 was an offer by the sellers to the buyers containing the terms and conditions on the back. The order of he 27th May, 1969 purported to be an acceptance of that offerin that it was for the same machine at the same price, but it contained such additions as to cost of installation, date of delivery and so forth that' it was in law a rejection of the offer and constituted a counter-offer. As Mr. Justice Megaw said in Trollope & Colls Ltd. & ors. v. Atomic Power Constructions Ltd. (1962) 1 Weekly Law Reports at page 337: "… the counter-offer kills the original offer" The letter of the sellers of the 5th June, 1969 was an acceptance of that counter-offer, as is shown by the acknowledgement which the sellers signed and returned to the buyers. So on our traditional analysis, the contract was concluded on the buyers terms and conditions: and those terms and conditions did not contain any price variation clause at all.

13

To go on with the facts of the case. The important thing is that the sellers did not keep the contractual date of delivery which was March/April 1970. The machine was ready about September 1970 but by that time the buyers' production schedule had to be re-arranged as they could not accept delivery until November 1970. Meanwhile the sellers had invoked the price increase clause. They sought to charge the buyers an increase due to the rise in costs between the 27th May, 1969 (when the order was given) and the 1st April, 1970 (when the machine ought to have been delivered). It came to £2,892. The buyers rejected the claim. The judge held that the sellers were entitled to the sum of £2,892 under the price variation clause. He did not apply the traditional method of analysis by way of offer and counter-offer. He said that in the quotation of the 23rd May, 1969 "one finds the price variation clause appearing under a most emphatic heading stating that it is a term or condition that is to prevail". So he held that it did prevail.

14

I have much sympathy with the judge's approach to this case.in many of these cases our traditional analysis of offer, counter offer, rejection, acceptance and so forth is out of date. The better way is to look at all the documents passing between the parties - and glean from them - or from the conduct of the parties whether they have reached agreement on all material points ven though there may be differences between the forms and conditions printed on the back of them. As Lord Cairns said in Brogden v. Metropolitan Railway (1877) 2 Appeal Cases at page 672: "There may be a consensus between the parties far short of complete mode of expressing it, and that consensus may be discovered from letters or from other documents of an imperfect nod incomplete description". Applying this guide, it will be found that in most cases when there is a "battle of forms",...

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1 firm's commentaries
  • Battle Of The Forms - GHSP Inc v AB Electronic Ltd [2010] EWHC 1828 (Comm)
    • United Kingdom
    • Mondaq United Kingdom
    • 12 May 2011
    ...this point were cited and in particular the words of Lord Denning MR in Butler Machine Tool Co Ltd v Ex-Cell-O Corporation (England) Ltd [1979] 1 WLR 401 at 404H "...in most cases when there is a "battle of the forms", there is a contract as soon as the last of the forms is sent and receive......
6 books & journal articles
  • Contract Law
    • Singapore
    • Singapore Academy of Law Annual Review Nbr. 2001, December 2001
    • 1 December 2001
    ...2 SLR 399 endorsed, interestingly, the approach adopted by Lord Denning MR in Butler Machine Tool Co v Ex-Cell-O Corporation (England)[1979] 1 All ER 965 in the context of “continuing negotiations” or (as it is sometimes termed) the “battle of the forms” (see also supra, “The Objective Appr......
  • Contract Law
    • Singapore
    • Singapore Academy of Law Annual Review Nbr. 2000, December 2000
    • 1 December 2000
    ...flexible (but vaguer) approach in the English Court of Appeal decision of Butler Machine Tool Co v Ex-Cell-O Corporation (England) Ltd[1979] 1 WLR 401 should prevail). LP Thean JA, who delivered the judgment of the court in Gn Muey Muey, also made the following observations in the context o......
  • Contract Law
    • Singapore
    • Singapore Academy of Law Annual Review Nbr. 2013, December 2013
    • 1 December 2013
    ...whether the High Court was right to have endorsed Lord Denning's approach in Butler Machine Tool Co Ltd v Ex-Cell-O Corp (England) Ltd[1979] 1 WLR 401; [1979] 1 All ER 965 (‘Butler Machine’) on this issue. In that case, Lord Denning advocated a different way of finding a contract rather tha......
  • Contract Law
    • Singapore
    • Singapore Academy of Law Annual Review Nbr. 2008, December 2008
    • 1 December 2008
    ...formation rules. One such comment related to Lord Denning”s suggestion (in Butler Machine Tool Co Ltd v Ex-Cell-O Corp (England) Ltd[1979] 1 WLR 401) to substitute the rigid adherence to offer and acceptance rules with a more fluid approach that focuses on the finding of agreement on materi......
  • Request a trial to view additional results

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