Dougland Support Services v Allscan Services Ltd.

Post-contractual words or conduct cannot be used to construe the agreement made at the time. They may, however, establish a later contract or variation. Uncommunicated subjective intention cannot determine whether contractual terms were accepted. Acceptance by conduct is assessed objectively. Where a quotation sets out the services, commencement date and contractual terms, subsequent performance and payment may establish acceptance of the whole offer, including its termination provision. An appellate court may intervene where the first-instance judge failed to address the correct question and reached a conclusion on an improper evidential basis.

Allscan supplied sanitary and clinical waste services at Bristol International Airport. After Bristol Airport Plc transferred the main contract to Dougland, Allscan offered to provide the services as Dougland’s subcontractor. A revised quotation dated 19 January 2000 set out the services, price, commencement date and a termination clause requiring at least three months’ notice expiring on the anniversary date. Dougland accepted the services and paid for them.

In March 2001 Dougland gave one month’s notice. District Judge Frenkel awarded Allscan £2,510, holding that the contract was terminable on three months’ notice at any time. His Honour Judge Bursell QC allowed Allscan’s appeal, holding that the whole quotation had been accepted. The issue before the Court of Appeal was whether acceptance by conduct included the revised termination clause.

Lord Justice Dyson delivered the leading judgment. Lord Justice Mummery and Lord Justice Schiemann agreed. The appeal was dismissed.

1. The revised quotation was not merely an offer to vary price and scope. It was headed as an agreement and quotation, stated the commencement date, and set out the terms on which Allscan would provide the services. The termination clause was therefore part of the offer.
2. Applying Whitworth Street Estates v Miller [1970] AC 583, post-contractual words or conduct cannot be used as an aid to construing the contract made at the time. Such conduct may, however, show that the parties later made a new contract or agreed a variation.
3. Where there is no dispute about what was said or done when the contract or variation was made, a party’s uncommunicated intention or later understanding cannot determine the contractual effect of those acts and words. The question is objective.
4. Acceptance by conduct required asking whether it was clear that Dougland, by accepting supplies after receiving the quotation and paying for them, accepted all its terms. The proper inference was that Dougland accepted the whole quotation, including termination by at least three months’ notice expiring on the anniversary date.
5. The passages relied on from Tanfern Limited v Cameron-MacDonald [2000] 1 WLR 1311 did not apply. The district judge had not made the appropriate findings or addressed whether the termination clause was accepted by conduct. His conclusion rested solely on later letters, which could not properly determine the contractual issue.

The appeal was dismissed with costs assessed at £4,209.

• Court of Appeal (Civil Division): In [2003] EWCA Civ 61, dismissed Dougland’s appeal and awarded costs of £4,209.
• Bristol County Court: On 16 February 2002, His Honour Judge Bursell QC allowed Allscan’s appeal from District Judge Frenkel, holding that the contract required at least three months’ notice expiring on the anniversary date.
• Bristol County Court: On 13 December 2001, District Judge Frenkel awarded Allscan £2,510 for wrongful termination, holding that the contract was terminable on three months’ notice at any time.