Gordon Russell (UK) Ltd v Warwick

Whether a quotation is an offer or an invitation to treat is a question of fact. Where standard conditions state that no contract arises until an acknowledgment of order, a signed quotation may operate as the buyer’s offer and the acknowledgment as acceptance. The payment term is then determined from the incorporated conditions and acknowledgment. An appellate court should not interfere with that factual and documentary conclusion unless the judge erred in law or misconstrued the evidence. An ambiguous expression such as completion/sign-off need not be construed where it was not a term of the contract.

The buyer appealed findings made by Coventry Crown Court in a dispute concerning bespoke furniture supplied and installed by the seller. The principal issue concerned formation of the contract and the applicable payment term. The buyer relied on a signed quotation stating that the balance was due on completion or sign-off. The seller relied on standard conditions providing payment at the end of the calendar month following invoicing and stating that no contract arose until an acknowledgment of order. The Crown Court treated the quotation as an invitation to treat, the signature as an offer, and the acknowledgment as acceptance. The appeal, brought with leave of Laws LJ, concerned whether that conclusion was legally or evidentially flawed.

Appeal dismissed.

1. The judge was entitled to treat the quotation as an invitation to treat rather than an offer. The buyer’s signature converted it into an offer, which the seller accepted by sending the acknowledgment of order. This conclusion was supported by the incorporated standard conditions, particularly clauses 2.1 to 2.4, which contemplated a quotation, purchase order and acknowledgment and stated that no contract bound the company until the acknowledgment was issued. [5]-[7]
2. The applicable payment term was therefore the term in the standard conditions requiring payment by the end of the calendar month following the month of the company’s invoice. The contractual price was consequently due on 31 December 2002. [6]-[7]
3. Whether the quotation was an offer or an invitation to treat was a question of fact. An appellate court should not interfere with such a conclusion where the judge has not erred in law or misconstrued the evidence. On the evidence, the judge was wholly entitled to reach, and was correct to reach, the conclusion adopted. [11]
4. The pleadings and evidence showed that variation of the standard terms had been contemplated, and a company official had considered completion or sign-off to be the payment term. Those matters did not overcome the judge’s conclusion on contract formation. The claimant was required to make a coherent case on the contractual terms rather than advance competing variations. [8]-[10]
5. The court did not need to decide the meaning of completion or sign-off because that wording was not a contractual term. Lord Justice Moses nevertheless advised that such ambiguity should be avoided in future contracts. [12]

• Court of Appeal (Civil Division), [2006] EWCA Civ 1851: appeal dismissed.
• Coventry Crown Court: His Honour Judge Oliver-Jones QC held that the quotation was an invitation to treat, the signed quotation an offer, and the acknowledgment of order the acceptance; payment was due under the standard conditions.