Two recent cases illustrate the wisdom of taking advice to make sure that before you sign an agreement, its terms have been reviewed and its meaning is clear.
In the first case, a company which produced three different quotations for the supply of bespoke furniture was pleased to find that it was successful in securing the contract. However, the 'accepted' quotation included an erroneous clause allowing payment to be made after the customer had 'signed off' the delivered furniture. The prior quotations had included standard terms and conditions which provided for payment at the end of the month following the month of invoice.
The case was argued all the way to the Court of Appeal, which judged that the third quotation was an invitation to contract, not a contractual offer as such, so the standard terms and conditions did apply.
The second was a Canadian case in which a million dollars rested on the meaning implied by the placement of a single comma in a contract. The contract concerned included a clause saying that it would '...continue in force for a period of five (5) years from the date it is made, and thereafter for successive five (5) year terms, unless and until terminated by one year prior notice in writing by either party'.
The question that arose was whether or not the second comma meant (as is usual) that the beginning and end of the sentence should be read together - in which case notice could be given at any time - or not. In the latter case, notice could only be given to end the contract at the end of a five-year term. The adjudicator ruled that the meaning was that notice could be given at any time. An appeal on that judgment is being launched.
Both of these cases could have been avoided had the contractual terms been considered carefully and amendments been made to remove the areas of potential doubt in the contracts.
Contact Dean Parnell on 0121 698 2200 or email d.parnell@sydneymitchell.co.uk for advice on any aspect of contract law.
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