Pickfords Ltd v Celestica Ltd

In contract formation, a later offer to the same offeree does not automatically revoke an earlier offer. The effect depends on the nature of the offers and the circumstances. A materially different later offer may supersede and revoke the earlier offer where it indicates a different contractual regime. Acceptance is construed objectively. A purported acceptance which adds a material term, such as a financial cap, is a counter-offer. Performance may accept that counter-offer by conduct. Where the offeree is an organisation, notice of revocation need be communicated to the organisation, rather than to a particular employee.

Pickfords Ltd v Celestica Ltd concerned competing documents relating to the relocation of the defendant’s equipment. Pickfords sent an initial offer based on a charge per vehicle load, followed by a detailed fixed-price proposal. Celestica later sent a fax referring expressly to the initial quotation and stating that its order was not to exceed £100,000. The Manchester County Court held that the fax accepted the initial offer and dismissed Pickfords’ claim for the fixed price in the later proposal. The appeal concerned whether the later proposal revoked the initial offer and whether the subsequent fax accepted the initial or later offer.

1. Appeal dismissed. The contract incorporated the terms of the initial offer, subject to the additional £100,000 cap, rather than the terms of the later fixed-price proposal.
2. An offer may be revoked before acceptance. The making of a later offer to the same offeree does not, without more, revoke the earlier offer. The question is whether the later offer, viewed in its nature and circumstances, clearly indicates an intention to withdraw the earlier one. A later quotation requested to provide an alternative basis for decision may leave both offers available for acceptance.
3. Here, the later proposal went materially beyond a difference in price. It described the services, the client’s obligations, health and safety provisions, and Pickfords’ standard terms and conditions. In the absence of findings explaining why it was made, its substantial differences from the initial offer showed that it superseded and revoked that offer.
4. The subsequent fax had to be construed objectively. Its express reference to the initial quotation, its absence of any reference to the later proposal, and the inclusion of a £100,000 ceiling showed that it purported to accept the initial offer. The words “confirmation” and “quotation” had no special significance and did not establish acceptance of the later proposal.
5. Because the initial offer had been revoked, the fax could not operate as an acceptance. It was a counter-offer to take the services on the initial terms, subject to the cap. Pickfords accepted that counter-offer by carrying out the work. Even if the initial offer had not been revoked, the cap was a material new term and the fax would still have constituted a counter-offer accepted by conduct.
6. Lady Justice Arden added that, where the offeree is an organisation, communication of revocation to the organisation is sufficient; it need not be communicated to the particular employee responsible for accepting estimates. The question of when notice sent by post is received by an organisation did not arise.
7. The appeal was dismissed with costs subject to detailed assessment. Pickfords was ordered to pay Celestica an interim payment of £6,000 on account.

1. Court of Appeal (Civil Division) — The appeal from the Manchester County Court was dismissed. [2003] EWCA Civ 1741
2. Manchester County Court — Mr Recorder Narayan held that the 15 October 2001 fax accepted the initial offer and dismissed Pickfords’ claim for the fixed price in the later proposal.