Tekdata Interconnections Ltd v Amphenol Ltd

In a battle of forms, the court should ordinarily apply the traditional rules of offer and acceptance. Where a buyer offers to contract on its terms, the seller acknowledges the order on its own terms, and performance follows without more, the contract is generally made on the seller’s terms.

That result may be displaced where the documents and conduct objectively establish a common intention that other terms should prevail. An express agreement or a necessary inference from circumstances, such as a clear course of dealing, is required. This is a high hurdle. The court must ascertain the parties’ objective intentions when the contract was made. Subsequent correspondence may assist in establishing what terms were agreed, but dispute-resolution correspondence will commonly carry little weight.

Tekdata purchased connectors from Amphenol for incorporation into cable assemblies ultimately intended for aircraft engine control systems. Tekdata’s purchase orders stated that its own terms applied. Amphenol acknowledged the orders subject to its own printed terms, then supplied the goods. Tekdata later alleged late delivery and defective goods. Amphenol relied upon exclusions and limitations in its terms.

On a preliminary issue, HH Judge Simon Brown QC in the Birmingham Mercantile Court held that Tekdata’s terms governed the contracts. He relied upon the parties’ long commercial relationship, the supply-chain context, certificates of conformity and Amphenol’s failure to invoke its terms until serving its defence.

Amphenol appealed. The central issue was whether the parties’ wider relationship and conduct displaced the traditional offer-and-acceptance analysis under which Amphenol’s acknowledgement was the final counter-offer accepted by performance.

1. The appeal was allowed unanimously. The contracts were governed by Amphenol’s terms and conditions. Tekdata’s purchase orders were offers on its terms. Amphenol’s acknowledgements, which expressly invoked its own terms, were counter-offers accepted when performance followed.

2. Longmore LJ held that the traditional offer-and-acceptance analysis must ordinarily be adopted in a battle of forms. It may be displaced where the documents and conduct show a common intention that other terms should prevail. The decision in Butler Machine Tool Co Ltd v Ex-Cell-O Corpn (England) Ltd [1979] 1 WLR 401 did not establish that the traditional analysis should be abandoned. Even Lord Denning MR ultimately identified acceptance of the buyer’s terms in the documents.

3. Context and conduct can exceptionally displace the ordinary result, but the circumstances must be sufficiently strong. A clear course of dealing may justify that conclusion. The parties’ long relationship, the importance of delivery and quality, the related supply-chain arrangements and Amphenol’s certificates of conformity did not establish such a course or common intention.

4. Dyson LJ agreed and emphasised that the ordinary analysis promotes commercial certainty. Ignoring the express reference to Amphenol’s terms required either an express agreement or an agreement necessarily inferred from the circumstances. Neither was proved.

5. The parties’ objective intentions had to be determined at the time of contracting. Post-contract conduct may be admissible to establish what the contractual terms were, as distinct from interpreting their meaning. Nevertheless, Amphenol’s attempts to resolve the dispute without invoking its terms did not show that it had never intended those terms to apply.

6. Pill LJ agreed that surrounding circumstances could reveal that a party never intended its printed terms to apply. The judge’s findings that Amphenol’s staff knew Tekdata’s terms would govern had no evidential basis, and the correspondence did not justify that inference.

1. Court of Appeal (Civil Division): The appeal was allowed unanimously. The court held that Amphenol’s terms and conditions governed the contracts.

2. Birmingham Mercantile Court: HH Judge Simon Brown QC determined a preliminary issue in Tekdata’s favour, holding that Tekdata’s terms applied. That determination was reversed.