Tullow Ghana Limited v Vallourec Oil and Gas France S.A.S

In a contractual “battle of the forms”, the court must examine the contemporaneous documents and conduct as a whole. The “last shot” doctrine does not apply where the final communication objectively operates as an unqualified acceptance, or where the parties’ agreed terms require amendments to be expressly communicated and agreed in writing.

Express warranty provisions and entire agreement clauses will not exclude statutory implied conditions without clear language. A CFR delivery term ordinarily fixes delivery, transfer of risk and title when the goods pass the ship’s rail. On limitation, the claimant bears the initial burden of showing, on the balance of probabilities, a prima facie cause of action accruing within time; the evidential burden then passes to the defendant to show earlier accrual.

The claimant sought damages for allegedly defective tubing supplied for offshore water-injection wells. The parties disputed when their 2008 contract was concluded, whether the defendant’s standard export-sale conditions were incorporated, the construction of agreed warranty and acceptance provisions, the incorporation of statutory terms under the Sale of Goods Act 1979, the point of delivery under CFR terms, and the burden of proof on limitation.

The court determined seven preliminary issues. The central questions were whether the contract incorporated only previously negotiated purchase-order terms or also the defendant’s standard conditions, and whether claims relating to tubing supplied in 2009 were time-barred.

1. Contract formation and incorporation. The contract was concluded on 25 November 2008 when the defendant returned the countersigned purchase order. Considering the documents and conduct as a whole, the covering letter, acknowledgements and enclosure of the defendant’s standard conditions did not amount to a counter-offer. They confirmed the goods and were administrative in character. The contract incorporated the previously agreed PO 167 terms, but not the defendant’s General Conditions of Export Sale.
2. Warranty provisions. Clause 8 of the defendant’s conditions was not incorporated. Even if it had been, it would conflict in whole or in part with the negotiated warranty in clause 11, which provided wider protection and preserved the claimant’s other rights. Clause 6 created rights of rejection and a limited right to expenses directly linked to defective material which had been rejected. It did not otherwise limit contractual remedies. Clause 11 preserved the claimant’s right to damages for breach of statutory or implied terms.
3. Statutory implied terms. Sections 14(2), 14(2A) and 14(2B) of the Sale of Goods Act 1979 were implied. Neither the defendant’s warranty wording, if incorporated, nor the entire agreement clause used sufficiently clear language to exclude the statutory conditions.
4. Delivery. Under the CFR Takoradi term and INCOTERMS 2000, delivery of each shipment occurred when it passed the rail of the carrying ship. The wording “fully delivered” in clause 5 could be read consistently with that obligation.
5. Limitation. The claimant initially had to show, on the balance of probabilities, prima facie evidence of breach causally connected with the damage and accruing within the six years before the standstill agreement. If that threshold was met, the burden passed to the defendant to show that the cause of action in reality accrued earlier.

The preliminary issues were answered accordingly. The parties were directed to agree an order and address consequential matters with the Commercial Court.