C v D & D2

Part 36 is a self-contained procedural code. General contractual rules apply only where consistent with its terms. A Part 36 offer must remain capable of acceptance unless withdrawn or varied in accordance with the rules. A genuinely time-limited offer, which expires by its own terms, cannot be a Part 36 offer. Where an offer letter was drafted on the mistaken assumption that such an offer could attract Part 36 consequences, the court should not distort its language to make it compliant. The offer may instead be construed as an ordinary time-limited offer, with no Part 36 consequences.

The claimant sought a declaration under CPR r.3(1)(m) concerning an offer to settle a land-sale damages claim. The offer letter stated that the offer would remain open for 21 days, referred expressly to Part 36, and set out proposed costs consequences for non-acceptance. The defendants purported to accept the offer on 5 November 2010, after the stated period had expired. The central issues were whether the offer was a Part 36 offer, whether the 21-day wording made it time-limited, and whether the subsequent correspondence left any offer open for acceptance.

1. The application succeeded. The court declared that the offer was not open for acceptance on 5 November 2010 and had not been accepted.

2. Part 36 is a self-contained code. The general law of contract, including rules concerning lapse and rejection of offers, must give way where inconsistent with the rules. The court must nevertheless read the words of an offer according to their proper meaning and must not force them into conformity with Part 36.

3. A time-limited offer is one which expires if not accepted within the specified period. Such an offer is not capable of being a Part 36 offer. Rules 36.9(2) and 36.14(6), together with the structure of Part 36, show that a Part 36 offer must remain capable of acceptance unless withdrawn or varied in accordance with the rules. The offeror may withdraw it after the relevant period, but cannot obtain the associated costs protection while allowing it to expire automatically.

4. The wording that the offer would be open for 21 days was, viewed apart from Part 36, a clear time limit. The definition of “the Relevant Period” and the reference to rule 36.14 indicated that the draftsman mistakenly believed that a time-limited offer could be a Part 36 offer. It would therefore be wrong to construe the letter as requiring acceptance after 21 days merely to give effect to the expressed intention to invoke Part 36.

5. The letter was consequently a valid ordinary time-limited offer, but not a Part 36 offer. It expired before the defendants purported to accept it. The court did not need to determine the effect of the later emails, although it expressed the tentative view that they would not have amounted to withdrawal of a Part 36 offer.