Nicolene Ltd v Simmonds
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE SINGLETON,LORD JUSTICE HODSON |
| Judgment Date | 05 March 1953 |
| Judgment citation (vLex) | [1953] EWCA Civ J0305-1 |
| Docket Number | 1951 N. No. 1962 |
| Court | Court of Appeal |
| Date | 05 March 1953 |
[1953] EWCA Civ J0305-1
In The Supreme Court of Judicature
Court of Appeal
Lord Justice Singleton
Lord Justice Denning and
Lord Justice Hodson
Counsel for the Appellant: MR KENNETH DIPLOCK, Q.C., and MR MARK LITTMAN, instructed by Mr Lucien Fior.
Counsel for the Respondents: MR S.H. NOAKES, instructed by Messrs Gouldens.
The claim of the Plaintiff Company, Nicolene, Ltd., is founded upon what they say was a contract in writing contained in a letter from the Plaintiffs to the Defendant, Mr Simmonds, dated the 10th August, 1951, and a letter from the Defendant to the Plaintiffs dated the 16th August, 1951, and a further letter from the Plaintiffs to the Defendant dated the 29th August, 1951. It is said that by a contract so constituted the Defendant agreed to sell to the Plaintiffs, and the Plaintiffs agreed to buy from the Defendant, 3,000 tons of Thomas quality reinforced bars of West German origin in mixed sizes of 6/30 millimeters at £45. 15s.5d. per ton of 1016 kilos on the terms and conditions set out in the detailed order of the Plaintiffs attached to their letter of the 10th August, 1951. It is further said in the Statement of Claim that the Defendant defaulted upon the contract; he did not make deliveries which he ought to have made, and that the Plaintiffs, who were intending to export, or to cause to be exported, the reinforcing bars to Pakistan lost their profit and suffered damage.
Their claim came before Mr Justice Sellers in November of last year, and he, after hearing the evidence and the submissions of Counsel, came to the conclusion that the Plaintiffs had proved their case, and he gave judgment against the Defendant for £6,900 damages.
Mr Justice Sellers had before him the Defence of the Defendant, and he had considerable argument to which he pays tribute in his judgment. There were many defences raised upon the Pleadings, and in the argument before the learned Judge. Before this Court, on the hearing of the appeal of the Defendant, onlyone question had been raised, and that really arises upon the plea in paragraph 1 of the Defence "The Defendant admits the letters referred to in Paragraph 1 of the Statement of Claim but denies that the same constituted a concluded contract between the Plaintiffs and the Defendant."
We have had authorities cited to us in order to help us to form a view as to whether or not on the documents in this case it can be said that there was a concluded contract between the parties. I do not propose to refer to them to length. If I may say so, the position is covered by a judgment of Mr Justice McNair in the case of British Electrical and Associated Industries (Cardiff) Ltd. v. Patley Pressings, Ltd., Reid Bros.(Glasgow) Ltd., Third Party, Douglas Scott, Ltd., Fourth Party, reported in No. 6, Second Volume, of the 1953 Weekly Law Reports at page 280. In that case: "The terms of a contract note in relation to a sale of steel contained the following clause: 'subject to force majeure conditions that the government restricts the export of the material at the time of delivery.' There was a variety of force majeure conditions in the trade, and no evidence that any particular ones had been agreed on. The buyers relied on that note as evidencing a contract"; and it was held by Mr Justice McNair: (1) Because the words of the force majeure clause in the note were too obscure to be capable of any definite or precise meaning; and (2) because 'conditions' in the phrase 'force majeure conditions' meant 'clauses' or 'stipulations' and not 'contingencies' or 'circumstances', and that, it not being agreed which conditions applied, there was no consensus ad idem, and therefore no completed contract…"
The learned Judge in that case at page 283 cited some words of Lord Maugham of Lord Wright in the report of the case of G. Scammell & Nephew, Ltd. v. Custon, reported in 1941 Appeal Cases at page 251. The words of Lord Maugham at page 255 are: "In order to constitute a valid contract the parties must so express themselves that their meaning can be determined with a reasonable degree of certainty"; and Lord Wright said at page 268: "The first ground (on which the Court ought to hold on the facts of that case that there was no contract) is that the language used was so obscure and incapable of any definite or precise meaning that the Court is unable to attribute to the Parties any particular contractual intention.'"
Mr Diplock submitted to this Court that applying those words, we ought, on the documents in this case, to hold that the parties had not entered into a contract; that there was no concluded contract between the parties, and, again, taking a later passage from the judgment of Mr Justice McNair, he drew our attention to the fact that even though the parties thought and acted on the basis that a contract existed between them, no consensus ad idem will be held to exist where there still remains to be negotiated and agreed the exact form of a clause or of conditions.
I have referred to the judgment of Mr Justice McNair because in it the learned Judge considered the authorities over a considerable period, and all the questions which are relevant are considered; but the case which was before Mr Justice McNair was quite different from the one with which we have to deal.
I come now to the three, or, perhaps, four, documents for our consideration, the three letters and the order attached to the first of those letters.
The letter of the 10th August, 1951, from the plaintiffs to the Defendant contains this passage: "We enclose our detailed order and require your written confirmation of acceptance of the order…" The detailed order of the same date sets out the goods which are required; the price; quality; how payment is to be made; how shipment is to be made, and that all packages should be marked with numbers; everything which is necessary for the detail of the order is there. As the letter in which the order is sent shows, the plaintiffs required the Defendant's written confirmation of acceptance of the order.
On the 16th August the Defendant writing not from the address given on the copy of the letter in the bundle before us, but from 100, Baker Street, his private address, wrote to the plaintiffs a letter, the whole of which I propose to read. It is the most important letter in the bundle: "I thank you for your letter and order of August 10th for 3,000 tons of Thomas Quality Reinforcing Bars of west German origin in mixed sizes of 6/30 mm. at $45. 14. 5per ton of 1016 kilos." Now comes the paragraph on which the argument has been based: "As you have made the order direct to me, I am unable to confirm on my usual printed form which would have the usual force majeure and war clauses, but I assume that we are in agreement that the usual conditions of acceptance apply." I shall come back to that clause in a moment. "I am pleased to inform you that my suppliers state they are certain they will be able to ship at least 25% of the order before the end of the month and might even be able to ship considerably more than this, and they will let me know further in a day or so. I thank you very much indeed for entrustingthis contact to me and assure you I will give the matter my personal attention, and you need have no anxieties that the order will be executed to your entire satisfaction. I hope this will be the first of many transactions together to our mutual advantage. Yours sincerely, H.B. Simmonds."
It is submitted by Mr Diplock that that letter was not an acceptance of the offer made by the plaintiffs' letter of August 10th; that it was at the most qualified acceptance because of the paragraph: "As you have made the order direct to me, I am unable to confirm on my usual printed form which would have the usual force majeure and war clauses. but I assume that we are in agreement that the usual conditions of acceptance apply."
I regard that letter as an acceptance of the offer; I do not think it ought to be treated as a qualified acceptance. It was in fact accepted by the action of the parties later, and, it may be said, by the letter of the 29th August from the plaintiffs.
On the 29th August the plaintiffs wrote to the Defendant; "Re: 3000 long tone Reinforcing Bars, Karachi, We confirm that we have instructed united Marine (1939) Ltd. 64 Queen Street, London, E.c.4. who are our Forwarding Agents, to arrange for shipping space to take the 3,000 tons" — they had given instructions for that to be done — "and have asked you to get into direct...
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