Tekdata Interconnections Ltd v Amphenol Ltd
Court of Appeal
Citations: [2009] EWCA Civ 1209; [2010] 2 All ER (Comm) 302; [2010] 1 Lloyd’s Rep 357; [2009] 2 CLC 866; [2010] CLY 2832
Facts
Tekdata made cable assembly items, and purchased harness connectors from Amphenol. They had been doing so for several years. On one occasion, Tekdata claimed that Amphenol were in breach of contract. They alleged that Amphenol’s latest delivery was late and of inadequate quality.
Amphenol argued that the contract was on their standard terms, which excluded liability in these circumstances. These terms had been provided in Amphenol’s acknowledgement of Tekdata’s purchase order. Tekdata responded that the contract was on their terms, which were provided in the purchase order. Tekdata’s terms did not include an exclusion clause.
At first instance, the trial judge examined the parties’ overall relationship and determined that the parties always intended Tekdata’s terms to apply. Amphenol appealed.
Issue(s)
- On what contract terms was the party’s relationship based?
- Was the judge correct to approach the issue by examining the parties’ relationship as a whole?
Decision
The Court of Appeal held in favour of Amphenol. The judge should have applied the traditional offer/acceptance analysis of contract formation. Had he done so, he would have found that the parties contracted on Amphenol’s terms. Tekdata’s purchase order was an offer. Amphenol’s acknowledgement was a counter-offer. Tekdata’s decision to accept delivery was acceptance of the counter-offer.
This Case is Authority For…
The correct approach to determining if there is a contract is the traditional offer/acceptance analysis. The approach suggested by Lord Denning in Butler Machine Tool v Ex-Cell-o [1979] 1 WLR 401, to analysis the parties’ relationship as a whole, was not correct.
The judge should focus on what the parties objectively intended, and not on what they think ought to have happened. Additionally, in ‘battle of the form’ cases, they also should not rely much on correspondence which arises after the contract has been formed.
Other
Longmore LJ commented that the traditional offer/acceptance analysis might be displaced where the parties had a long-term relationship leading to a clear course of dealing on particular terms. It might also not apply where the documents exchanged between parties made clear that some other terms were objectively intended to apply. However, neither was proven in this case.
