Words: 1965
The issue is whether E has made an offer to Palm. Invitations to treat are ‘offers to negotiate – offers to receive offers’. L By contrast, an offer is made where it can be objectively determined that there was an intention by the offer to be bound on acceptance. 2 On the facts, it can be seen that Ex.’s mere ‘suggestion’ of the differential pricing schemes was an expression of willingness to commence negotiations because the end of the trial was imminent.
Given the scale of the proposals in both length and cost, it could not be established, by applying n objective test, that the offered could reasonably construe a mere ‘outline’ document as an offer, that is unless its substance proved otherwise. Secondly, the supply of information about two pricing structures is akin to a mere quotation of price, like that seen in Harvey v Face. 3 However, a relevant issue that arises in distinguishing the present case is whether an inquiry was made.
It is not unreasonable to assume that following or during the April ‘suggestion’ conversation, C had made an inquiry in to the details of the ‘differential pricing’. If evidence suggested that E gave the document on her own accord, then this argument would be weakened. Thirdly, the two schemes give Palm wider discretion in selection and negotiation. 4 On the contrary, an argument in favor of the document being deemed an offer is that it was given to one party. However, following Cargill, this appears irrelevant. 5 It appears that an offer has not yet been made.
CSS Email Reply The issue is whether Co’s email reply constituted an offer. First it is to be established that a binding agreement has not formed. An agreement can be objectively established where there is mutual assent. 6 In Masters v Cameron, it was noted that, ‘the case may be one in which the intention of the parties is not to make a concluded bargain at all, unless and until they execute a formal contract’. Such intention can be expressed by a ‘subject to’ clause. 8 Regardless of whether or not G’s letter contained such clause, it can be inferred that Palm had no intention to form an agreement by way of Co’s email.
Firstly, the parties have not yet reached consensus on the matter relating to ending the arrangement. Therefore, the present case can be distinguished from CAB v Dean,9 because Palm has made a qualification by introducing a new term. The email, thus, resembles a Hyde v Wrench, 10 counter offer. Secondly, in Howard Smith & Co Ltd v Faraway,al it was suggested that ‘it is unlikely for a mere agreement on the price to be binding where the contemplated transaction is a lot more complex’. ‘Commonsense and commercial experience’ are relevant in ascertaining whether parties intended to be bound. 2 Given that service contracts go beyond a matter of cost, and that a significant transaction is involved, an informal agreement by way of exchanging a letter expressing interest in the ’12 month proposal’ reduces the likelihood that the agreement was binding. Nonetheless, G’s letter equates to a letter of intent. 13 And the email is effectively an offer in the context of negotiations. This determination has no practical repercussions. Draft ‘Fit’ Contract The issue is whether the email attached with the draft ‘Fit’ contract constituted a counter-offer.
Although G’s negotiations regarding the ending arrangement have been incorporated, new terms have been added. Applying Hyde v Wrench, the email would appear to be a counter-offer. However, it is likely that the draft contract was sent so that Palm had a reasonable opportunity to view the exhaustive formal contract before signing it. The signed draft contract of 10 June should be deemed the formal offer because an objective bystander would take the view that E had intent to be bound by its terms on acceptance. 4 Exchanges between E and Palm: 10 June to 18 August The issue turns to whether there was acceptance by Palm on the terms of the draft contract. In Empirical Holdings v Macho Paul, 15 it was noted that ‘contract requires an external manifestation of assent to an offer’. Kirby P stated that ‘assent may be inferred, although never specifically stated’. Firstly, acceptance could be inferred in circumstances “where something in the history of the transaction between the parties gives rise to ‘an inevitable inference from the conduct’. It could be argued that E had reasonably relied on Palm’s monthly issuing of purchase orders from July 2013, as signaling acceptance, on the basis that Palm had engaged in the same conduct in the trial agreement Without problem’. Secondly, ‘where an offered with a reasonable opportunity to reject the offer takes the benefit of them it is open to the tribunal of fact to hold that the offer was accepted according to its terms’. 6 Palm had reasonable opportunity to object. The terms were accessible from 4 June and Palm ought to have known that services would begin on 1 July 2013.
From July 2013, Palm took benefit of Ex.’s services without objection. Thirdly, the manner of acknowledging the terms is irrelevant, as conduct waives the need to communicate. 17 Therefore, G’s denial of C stating that J ‘would sign the contract when he returned’ and the fact that the Fit contract was never signed is irrelevant. The payments that Palm made in accordance with the invoices are analogous to the progress claim aments made by Empirical. In the telephone conversation, it was made known that a letter of acceptance was ‘good to go’.
Thus, E was induced to believe that services were rendered in connection with the terms of the draft contract. And Palm had knowledge of Ex.’s reliance that the payments were being made for their services and on the terms of the draft contract. In conclusion, it can be inferred from Palm’s conduct that the acceptance, signaled to E, was on the basis of the draft contract. Palm’s Standard Terms The issue is whether Palm’s standard terms are enforceable. Butler v Ex-Cell- O Corp. established that the ‘battle is won by the man who fires the last shot’. 8 Despite Palm’s purported terms being the latest ‘form’, they are to be rendered unenforceable. Firstly, in Butler, express acceptance of the buyer’s terms was evident by the seller signing the acknowledgment slip. In the present case, no such acceptance could be drawn. It can only, at best, be implied from E returning the invoices. This is a weak argument because by the time E began services, it was made known that Palm would be accepting Ex.’s terms. E had reason to believe that there was mutual assent and that no attempt to introduce new arms would ensue.
It would, therefore, be reasonable for E to return invoices on the belief that their relationship with Palm was governed by the draft contract. Secondly, Layton LLC in Butler said that in a business sense a mere quotation ‘does not bring into the contract the small print conditions on the back’. 19 Palm’s stipulation on the purchase orders is akin to the prevailing conditions that were seen on the seller’s quotation in Butler. In a business sense, it appears a purchase order is not an appropriate medium by which new terms are purported.
Thirdly, in Baltic Shipping v Dillon,20 it was established that terms which were available at the office, could not be incorporated into the contract. Similarly, it could be said that E was oblivious as to what the standard terms were, as there was merely a stipulation. It is unlikely that Palm’s standard terms are enforceable. Interpretation of Draft ‘Fit’ Contract The issue is whether clauses 9 and 10 of the draft ‘Fit’ contract are enforceable. It is a requirement of contract formation that the agreement between the parties is certain and complete. 1 Firstly, in clause 9 the reference to ‘end date’ is ambiguous as it could have two possible constructions, (i) the end date of he 12-month contract (1 July 2014), or (ii) the end date of the contract if exited early (19 May 2014). Secondly, in clause 10 there is an issue as to how ‘reverted back pro rata to ordinary rate’ is to be interpreted. Courts will attribute meaning unless it is impossible to do so. 22 Courts are also less inclined to deem a contract uncertain where parties have been performing the contract without difficulty. 3 Therefore, the uncertainty is open to interpretation. Ex.’s Claim E seeks to claim $30,000 for specific performance. Firstly, Palm would be stopped from denying agreement on the basis of the ‘Fit’ contract. Palm loud then argue that clause 10 is uncertain. As courts are willing to uphold an agreement entered into by the parties, it is likely that the court would try to give meaning to the ambiguity. 24 If the court interprets clause 10 in favor of E, then Palm could rely on promissory estoppels.
Palm would argue that E had made both a contractual promise and a promise by way of pre-contractual negotiations, that the provision of services would be on a confessional rate of $20,000. According to High Trees,25 E would be not be entitled to their strict legal rights in contract, if E has acted inconsistently with their promise. In Walton v Maier,26 Brenna J devised elements for establishing estoppels. The assumption that Palm relied on was the confessional. Palm was induced and acted reasonably by entering into the contract with the belief that they would pay the confessional rate.
Ex.’s action of claiming $30,000 would come at the detriment of Palm incurring financial loss, which would not have otherwise been foreseen. It would be unconscionable for E to claim because a substantial part of the contract has been performed by Palm. Also, as E had drafted the contract, E should have ensured that such matters were settled with certainty. It appears that Ex.’s promise of the confessional rate would be given effect and would be enforced. In the alternative, where the courts interpret clause 10 in favor of Palm, E would rely on promissory estoppels.
It could be inferred that Palm had made a promise to fulfill the 12-month contract on which E relied, by way of a confessional rate. Even then, given that there was an exit clause, it seems counterintuitive to say that Palm had made the promise to perform the entirety of the contract. In Sweets Aviation v Commonwealth,27 it was said that ‘Parties ay not be able to rely on an estoppels to protect their position where the subject matter of the estoppels is later encapsulated in a formal written contract’.
If E implied that Palm had made a promise, then it should have been properly settled in the formal contract. It is also contentious as to whether one could construe Palm’s promise as having indirectly made the promise to pay $30,000 to start. It is unlikely that E would succeed in claiming $30,000 on the basis of enforcing an implied promise, because it is requirement that clear representation need be made to establish estoppels. 28 E is seeking relief on the basis that Palm had not given E ‘a real and commercial opportunity for renewal’.
If the courts adopt the belief that ‘end date’ meant 1 July 2014, then E Widow not be entitled to recourse. However, if the ‘end date’ refers to 19 May, Palm would rely on the fact that they had fulfilled their obligations under clause 10, rendering clause 9 irrelevant. It appears that Palm could only reasonably fulfill both duties by giving more than 60 days notice before the end date. Given that Palm agreed, Palm ought to have known of this and E would be entitled to a remedy.