Brogden v Metropolitan Railway Company
House of Lords
Citations: (1877) 2 App Cas 666.
Facts
Brodgen had supplied Metropolitan Railway Company with coal for many years without any formal contract. Eventually, Brogden suggested that the parties draw up a formal contract. Metropolitan drew up a draft agreement, leaving certain parts blank for Brogden to fill in. Brodgen filled in the blanks, and also added an arbitration clause. He then signed the bottom of the agreement and sent it back to Metropolitan. Metropolitan did not respond.
The parties proceeded in accordance with the terms of the draft agreement and occasionally made reference to the ‘contract’ when dealing with minor disputes. However, when a significant dispute arose, Brogdan denied that any contract had been formed between them. Metropolitan sued Brodgan for breach of contract.
Issue(s)
- Was there a binding contract between the parties?
Decision
The House of Lords held in favour of Metropolitan. The parties’ conduct established that there was a contract between them, and Brogdan was in breach of it.
Metropolitan’s initial contract was possibly an offer, though perhaps not since it left some elements blank. In any case, because Brogden altered that draft agreement, he was making a counter-offer. Metropolitan then accepted this offer by acting in accordance with its terms.
This Case is Authority For…
Merely subjectively and privately assenting to a contract is not enough to amount to acceptance of an offer. However, acting on the terms of an offer can be enough to accept it.
Other
Lord Blackburn noted that the burden of establishing that the parties had been acting in accordance with a contract lies with the party who relies on that fact to establish their case (in this case, Metropolitan).
