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Hello,
I came across the following case in the BPP f4 text for exams up to June 2015:
British Steel Corpn v Clevel and Bridge and Engineering Co Ltd 1984
The facts: The defendants asked the claimants to supply nodes for a complex steel lattice-work frame, and sent the claimants a letter of intent, stating their intention to place an order on their standard terms. The claimants stated that they were unwilling to contract on such terms, but started work, and eventually completed and delivered all the nodes. They sued for the value of the nodes and the defendants counter-claimed for damages for late delivery.
Decision: Since the parties had not reached agreement over such matters as late delivery, there was no contract, and so there could be no question of damages for late delivery. However, since the claimants had undertaken work at the request of the defendants and the defendants had accepted this work, the claimants were entitled to a reasonable remuneration for services rendered.
My question is that this case doesn’t seem to have any actual contract made. Why were the claimants entitled to a reasonable remuneration if no agreement was made between them and the defendant? The defendant only gave a letter of intent and no order was placed according to the facts stated here. Am I to assume that because the defendant counter claimed for late delivery that an informal contract was made?
“in the BPP f4 text for exams up to June 2015:” Is this really 2015?
What an interesting case and one I’m not familiar with! So I’m flying by the seat of my pants in this response!
It looks to me that we have a contract by conduct. You mentioned the expression “an informal contract” and if by that you meant that it wasn’t in writing then I agree with you. But it does still seem to be a contract, in my mind, for three reasons.
First, how can BSC sue for late delivery if there was no contract? No contract, no late delivery, but BSC by their counter-claim indicate that there WAS a contract
Second, if there IS a contract, there is no mention of penalty / compensation for late delivery and there’s no indication of any side-contract indicating the possibility for such compensation
Third, I accept that there was no “formal contract” ie nothing in writing. However, where a person takes an action and delivers a good to another, and that good is accepted by that other, then it looks to me like a contract by conduct and that is recognised as a possibility in English law
But thanks for bringing that case to my attention 🙂
Thank you. I understand now that there was a contract by conduct, but would that mean that the claimants were entitled to fair remuneration, when the parties were not in agreement on the value at the time of the delivery? Or does the contract by conduct imply the goods were accepted on the claimants’ terms?
And yes the text is for exams in December 2014 and June 2015. Is an updated text necessary for F4?
“Is an updated text necessary for F4?” – I wouldn’t have thought that was necessary. What IS essential is that you acquire an up-to-date revision kit / exam kit from a reputable publisher and that you practice mcqs until you are totally thoroughly sick of them and then ….. practice them some more
I would have thought that the claimants would receive an award of fair remuneration. The expression that you have quoted “stating their intention to place an order on their standard terms” doesn’t tell me to which side the standard terms relate – it could relate to either BSC or to C & B Engineering. Whatever, it’s possibly the case that those standard terms did include mention of price.
If not, possibly the Court would look to see the rates applied to similar contracts honoured by C & B
OK?
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