Nicolene Ltd v Simmonds
Court of Appeal
Citations:  1 QB 543;  2 WLR 717;  1 All ER 822;  1 Lloyd’s Rep 189; (1953) 97 SJ 247;  CLY 661.
The claimant sent the defendant a letter ordering reinforcing bars. The order specified the price, quantity, characteristics of the goods and the method of payment and shipment. The defendant wrote back acknowledging the order, giving shipment details and stating:
‘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.’
There were not in fact any ‘usual conditions of acceptance’, nor did the defendant have a ‘usual printed form’. The claimant responded with shipping particulars and told the defendant that they had opened a line of credit for the goods.
When the defendant failed to deliver, the claimant sued for breach of contract. The defendant argued that there was no concluded contract between the parties because they had not agreed on the ‘usual conditions of acceptance’.
- Had the parties agreed on essential terms, and thereby formed a contract?
The Court of Appeal held in favour of the claimant. The parties had agreed on the essential elements of the contract. The defendant’s references to ‘the usual conditions of acceptance’ were meaningless, because there were no usual conditions of acceptance. Accordingly, the court ignored those statements.
This Case is Authority For…
Denning LJ stated that the courts must distinguishing between a meaningless clause (or one so ambiguous that it cannot be given meaning) and one which has not been agreed. It may be possible to ignore a meaningless clause and find the contract sufficiently certain as a whole. By contrast, if the parties have yet to agree on a key clause, it is more likely to mean there is no contract.
Singleton LJ explained that the court is not required to give meaning to every word in the contract. The issue is the meaning that the parties objectively intended the document as a whole to have.