“the Contractor’s liability for loss of use, loss of profit or other consequential loss arising in respect of the liability of the Contractor referred to in Clause 2.5.1 shall be limited to the amount, if any, named in Appendix 1”
“a possible way forward is that this limit does not impact on the PI level of£5m ie any consequential losses associated with PI items would be recoverable under the PI insurance up to the capped level.”
“HYL PI insurance cover confirmed and agreed at£5m . HYL maximum aggregate liability for consequential losses (loss of use etc) is agreed at£1.5m . However, if [LOR] legal advisors consider that amended wording to contract is needed to reflect this provision, then HYL agreement is subject to review and acceptance of proposed changes – [LOR] to advise position.”
“Whilst we acknowledge the cap level you have agreed with the Employer under the main contract, our position as a sub-contractor to you is different and we have proposed a reasonable commercial compromise to suit. We do not feel that any “concerns” of the Employers team are relevant to us, especially as we have already agreed to stand by the PI cover of£5m that we previously tabled.”
“The 2no. contract issues are now resolved. Main Contractor attendances are now concluded. [HYL] requested that the agreed programme be included within the contract documentation in lieu of a start date and period of time – [LOR] to respond. Contract documents have been signed and returned from Head Office.”
“We…confirm that our valuation will be issued to you on 23.12.04 – as our agreed contract with you.”
“As also advised earlier this week, the resolution of the warranty issues…may well have an impact on the relevant clause in the sub-contract concerning consequential losses. You will appreciate that the signing of the sub-contract will need all these outstanding matters cleared first.”
“As I stated in the message I left last Thursday, we urgently need to sign up Haden’s sub-contract. They have said they have not yet agreed the terms of their warranty and are using this as a reason not to enter into contract. I understand from colleagues dealing with the detail of those negotiations that there is one outstanding point regarding an overall cap on Haden’s liability. I further understand that agreement is awaited from your client and the other beneficiaries. It may be that you are awaiting instructions?”
“As you may know, we have been unable to conclude the sub-contract for this project. The principle issue (apart from the fact that the document Laing O’Rourke have issued does not yet fully reflect all the agreements made) is that of the appropriate level of the cap for consequential losses. At Laing O’Rourke’s request, we made direct contact in December of last year with your legal representatives Pinsents and we made some without prejudice compromise proposals to try to resolve the matter. Mr Chris O’Carroll of Pinsents has yet to respond to these proposals and we have been unable to make further contact with him despite leaving messages for him to call us back. We wrote to Laing O’Rourke on1 March 2005 asking for advice on how we should proceed but in the absence of a response I would request your assistance to move this matter to a mutually acceptable conclusion so that the sub-contract can be finalised and signed.”
“As you know, there have been subsequent discussions and correspondence between us to try and resolve and agree outstanding issues on the documents. Whilst good progress has been made we believe that it is in both our companies’ interests that the matters are closed out and the Sub-Contract duly signed and executed without further delay. With this objective, we set out below the necessary amendments that we believe need to be made to the documents, including for those matters already agreed between us.”
“As you are aware and at your instruction we have been in direct contact with your legal advisors, Pinsents to try to agree the appropriate cap on our Sub-Contract liability. After a number of discussions we have made a final proposal on the22nd December 2004 to Pinsents. As they have not responded (despite several requests to them and yourselves) we must assume that our proposal is agreed and the following amendment is therefore required. Add new clause as follows:- “8 In respect of Article 9 of the Main Contract, the Subcontractor’s corresponding liability under such warranties shall be limited to£1,500,000.00 …” “8 In respect of Article 9 of the Main Contract, the Subcontractor’s corresponding liability under such warranties shall be limited to£1,500,000.00 …”
“We look forward to your early agreement to the above but in line with our common objective to finalise these matters, we would advise that should we not hear from you to the contrary within the next seven days, we will amend the Sub-Contract accordingly and sign and execute it for return to yourselves.”
“SUB CONTRACT STATUS REPORT: Please note that their subcontract has yet to be agreed and potentially complex issues are still not clarified between the parties.”
“The subcontract documentation is to be signed by [HYL] in the form currently drafted by [LOR] with the only allowable amendment being the cap on liability which will be addressed in a supplemental letter confirming that the matter has not yet been concluded with the Employer.”
“I advised that we also required [HYL] to sign their subcontract as currently drafted with the exception of the liability point within the warranty and subcontract which would be reserved either by an additional clause or by a side agreement. He confirmed that this was the only point between us and that, whilst he would take advice, he did not see this as an issue.”
“Letter to LOR to summarise outstanding matters to conclude formation of Sub-Contract” and “Due to above “no contract” in place! May need to take advice – no need to progress immediately.”
“Whilst the contents of the above letter remain valid, we would clarify the following…”
“In the light of the contents of these letters and the increasingly belligerent tone of this and other recent correspondence concerning your approach to the further work you wish us to carry out and the valuation of and payment for work already done, we have felt constrained to seek legal advice. This has included leading counsel’s advice that has unequivocally confirmed that there has never been any agreement between us on the terms of a subcontract or a letter of intent.”
“(1) In order to determine whether a contract has been concluded in the course of correspondence, one must first look to the correspondence as a whole. (2) Even if the parties have reached agreement on all the terms of the proposed contract, nevertheless they may intend that contract shall not become binding until some further condition has been fulfilled. That is the ordinary “subject to contract” case. (3) Alternatively, they may intend that the contract shall not become binding until some further term or terms have been agreed. (4) Conversely, the parties may intend to be bound forthwith even though there are further terms still to be agreed or some further formality to be fulfilled. (5) If the parties fail to reach agreement on such further terms, the existing contract is not invalidated unless the failure to reach agreement on such further terms renders the contract as a whole unworkable or void for uncertainty (6) It is sometimes said that the parties must agree on the essential terms and it is only matters of detail which can be left over. This may be misleading since the word “essential” in that context is ambiguous. If by “essential” one means a term without which the contract cannot be enforced then the statement is true: the law cannot enforce an incomplete contract. If by “essential” one means a term which the parties have agreed to be essential for the formation of a binding contract, then the statement is tautologous. If by “essential” one means only a term which the Court regards as important as opposed to a term which the Court regards as less important or a matter of detail, the statement is untrue. It is for the parties to decide whether they wish to be bound and if so, by what terms, whether important or unimportant. It is the parties who are, in the memorable phrase coined by the Judge “the master of their contractual fate”
“There was no orderly negotiation of terms. Rather the picture is one of the parties, jockeying for advantage, inching towards finalisation of the transaction. The case bears some superficial resemblance to cases that have become known as "battle of the forms" cases where each party seeks to impose his standard conditions on the other in correspondence without there ever being any express resolution of that issue. In such cases it is usually common ground that there is a contract but the issue is what set of standard conditions, if any, is applicable. Here the issue is one of contract formation. Moreover, the present case is different in the sense that Trentham's case was that the sub-contracts came into existence not simply by an exchange of correspondence but partly by reason of written exchanges, partly by oral discussions and partly by performance of the transactions.”
“It seems to me that four matters are of importance. The first is the fact that English law generally adopts an objective theory of contract formation. That means that in practice our law generally ignores the subjective expectations and the unexpressed mental reservations of the parties. Instead the governing criterion is the reasonable expectations of honest men and in the present case that means that the yardstick is the reasonable expectations of sensible businessmen. Secondly, it is true that the coincidence of offer and acceptance will in the vast majority of cases represent the mechanism of contract formation. It is so in the case of a contract alleged to have been made by an exchange of correspondence. But it is not necessarily so in the case of a contract alleged to have come into existence during and as a result of performance. See Brogden v. Metropolitan Railway (1877) 2 A.C. 666; New Zealand Shipping Co. Ltd. v. A.M. Satterthwaite & Co. Ltd. [1974] 1 Lloyd's Rep. 534 at p. 539, col. 1; [1975] A.C. 154 at p. 167 D-E; Gibson v. Manchester City Council [1979] 1 W.L.R. 294. The third matter is the impact of the fact that the transaction is executed rather than executory. It is a consideration of the first importance on a number of levels. See British Bank for Foreign Trade Ltd. v. Novinex [1949] 1 K.B. 628, at p. 630. The fact that the transaction was performed on both sides will often make it unrealistic to argue that there was no intention to enter into legal relations. It will often make it difficult to submit that the contract is void for vagueness or uncertainty. Specifically, the fact that the transaction is executed makes it easier to imply a term resolving any uncertainty, or, alternatively, it may make it possible to treat a matter not finalised in negotiations as inessential. In this case fully executed transactions are under consideration. Clearly, similar considerations may sometimes be relevant in partly executed trans actions. Fourthly, if a contract only comes into existence during and as a result of performance of the transaction it will frequently be possible to hold that the contract impliedly and retrospectively covers pre-contractual performance. See Trollope & Colls Ltd. v. Atomic Power Construction Ltd., [1963] 1 W.L.R. 333.”
“It is sometimes difficult to determine whether a concluded contract has come into existence when there have been lengthy negotiations between the parties but no formal contract has ever been signed. It is suggested that a useful approach is to ask whether the following can be answered in the affirmative: (a) in the relevant period of negotiation, did the parties intend to contract? (b) at the time when they are alleged to have contracted, had they agreed with sufficient certainty upon the terms which they then regarded as being required in order that a contract should come into existence? (c) did those terms include all the terms which even though the parties did not realise it, were in fact essential to be agreed if the contract was to be legally enforceable and commercially workable? (d) was there a sufficient indication of acceptance by the offeree of the offer as then made complying with any stipulation in the offer itself as to the manner of acceptance? On such an approach the court’s task is to review what the parties said and did and from that material to infer whether the parties’ objective intentions as expressed to each other were to enter into a mutually binding contract.”
“The Sub-Contractor shall complete and return to the Contractor following the execution of the Sub-Contract, the Warranty Agreement(s) in the form set out in the document(s) attached hereto. The Contractor shall not be liable to make any payment under this Sub-Contract until the Sub-Contractor has complied with this provision. Further, and without prejudice to any other rights and remedies which the Contractor may possess, the Contractor shall be entitled at any time to determine the employment of Sub-Contractor under the Sub-Contract in the event that the Sub-Contractor does not procure and deliver to the Contractor the aforesaid Warranty Agreement.”
“Where the parties have not reached agreement on terms which they regard as essential to a binding agreement, it naturally follows that there can be no binding agreement until they do agree on those terms: see Rossiter v. Miller, (1878) 3 App. Cas. 1124 at p. 1151 per Lord Blackburn. But just as it is open to parties by their words and conduct to make clear that they do not intend to be bound until certain terms are agreed, even if those terms (objectively viewed) are of relatively minor significance, the converse is also true. The parties may by their words and conduct make it clear that they do intend to be bound, even though there are other terms yet to be agreed, even terms which may often or usually be agreed before a binding contract is made: see Love and Stewart per Lord Loreburn L.C. at p. 476.”
“As also advised earlier this week, the resolution of the warranty issues…may well have an impact on the relevant clause in the sub-contract concerning consequential losses. You will appreciate that the signing of the sub-contract will need all these outstanding matters cleared first.”
“35. A contractual acceptance has to be a final and unqualified expression of assent to the terms of the offer. Conduct will only amount to an acceptance if it is clear that the offeree did the act in question with the intention of accepting the offer. But the test as to whether there has been such agreement is an objective one. It follows that conduct which demonstrates an apparent intention to accept can be sufficient, despite uncommunicated mental reservations on the part of the offeree. However, it seems to me that for that situation to arise, the conduct in question must be clearly referable to the offer and, in the absence of knowledge of the offeree's reservations, not reasonably capable of being interpreted as anything other than acceptance ….”
“Even if the parties have reached agreement on all the terms of the proposed contract, nevertheless they may intend that contract shall not become binding until some further condition has been fulfilled.”
“As for a more legalistic analysis, the use of the definite article in preliminary 4.1.3 in context suggests, in my judgment, a clear requirement by Galliard, unless the contrary was either expressly agreed between the parties or arose between them by necessary implication, that whatever, if any, contract emerged in consequence of the invitation which the preliminaries represented, it would have to be under seal and therefore also that the option afforded by the articles (of execution under hand) was excluded. A person, such as Jarvis, dealing with Galliard on the basis of those preliminaries would, in my view, be entitled to proceed upon the footing that, unless some antecedent agreement was expressly made or could be inferred by necessary implication, then there would be no contract between it and Galliard on the basis of the preliminaries unless and until there was a deed between them. The effect was thus in that respect akin to the effect of the familiar phrase ‘subject to contract’ save that it was more similar to the less familiar ‘subject to formal contract’.”
“You will appreciate that the signing of the sub-contract will need all these outstanding matters cleared first.”
“The fact that the transaction was performed on both sides will often make it unrealistic to argue that there was no intention to enter into legal relations. It will often make it difficult to submit that the contract is void for vagueness or uncertainty. Specifically, the fact that the transaction is executed makes it easier to imply a term resolving any uncertainty, or, alternatively, it may make it possible to treat a matter not finalised in negotiations as inessential.”
“Were it necessary, I would be prepared to find that it would not be fair and just in this case for BEL to resile from the agreement they purported to make with JBE in June 1993. I consider that both parties from that time, and indeed earlier, conducted themselves on the basis that they had a binding agreement. Ipso facto, I think they were representing to each other that that was the position. I think it would be unjust now for BEL to be able to walk away from the agreement in order to obtain payment for their work on a different basis from that agreed between the parties. The amount and terms of payment, which was the subject of agreement, are not matters which BEL say were uncertain. BEL received payments on the basis of the agreed terms and, in the months before they asserted that there was no binding contract, were asking for more money by reference to the terms of the June 1993 agreement. During that time the documents do not show them to be pressing JBE for agreement of cl 35 or tolerances and I consider it relevant that BEL’s work was near its end when they alleged there was no contract.”
“Mr Waugh contends that the pleading is not sustainable, even to the Pt24 standard for three distinct reasons. (a) An inter-partes estoppel cannot operate as to expand or contract the effect of a court order (b) an estoppel cannot be used as a key element of a claim (sword not shield) and particularly it cannot operate to create a legal relationship when there was none at the outset. (c) In any event the material pleaded is an inadequate basis to found an estoppel. I think he was right for all three reasons. …”
“In reality BTH’s possible success in this litigation would depend on establishing liability against M&S in equity when it would not otherwise be liable in contract, and would represent a dramatic, if not indeed a revolutionary development of the legal principles governing the enforcement of private obligations.”
“Mr Bowdery submits that WCM represented, or alternatively there was a clear common understanding between the parties, that a contract existed between them, in that (a) all applications for payment were made through and by WCM, (b) WCM directed and managed the piling works and was paid for the piling works as if WCM was the management contractor responsible for those works. In the result, it is submitted that WCM is estopped from denying that it was responsible for the piling works and contractually obliged to pay for them. Had it been necessary to decide this issue, I would have found in favour of WCM. The short answer to Mr Bowdery’s arguments is that, on the hypothesis that no sub-contract was in fact concluded, all of the conduct relied on by him is explicable on the basis that the parties were acting in anticipation that they would conclude a binding sub-contract that would operate retrospectively. I do not consider that the conduct is clearly and unequivocally consistent with there being in place a concluded binding sub-contract.”
“we urgently need to sign up Haden’s sub-contract. They have said they have not yet agreed the terms of their warranty and are using this as a reason not to enter into contract.”
“The essential factors giving rise to an estoppel are I think:- (1.) A representation or conduct amounting to a representation intended to induce a course of conduct on the part of the person to whom the representation is made. (2.) An act or omission resulting from the representation, whether actual or by conduct, by the person to whom the representation is made. (3.) Detriment to such person as a consequence of the act or omission.”
“When the parties to a transaction proceed on the basis of an underlying assumption - either of fact or of law - whether due to misrepresentation or mistake makes no difference - on which they have conducted the dealings between them - neither of them will be allowed to go back on that assumption when it would be unfair or unjust to allow him to do so. If one of them does seek to go back on it, the courts will give the other such remedy as the equity of the case demands.”
“This form of estoppel is founded, not on a representation of fact made by a representor and believed by a representee, but on an agreed statement of facts the truth of which has been assumed, by the convention of the parties, as the basis of a transaction into which they are about to enter. When the parties have acted in their transaction upon the agreed assumption that a given state of facts is to be accepted between them as true, then as regards that transaction each will be estopped as against the other from questioning the truth of the statement of facts so assumed. ”
“As I have already said, the fact that there was never any agreement to reach or even to set out the essential principles which might govern any legally binding long-term relationship indicates that neither party can here objectively be taken to have intended to make any legally binding commitment of a long-term nature, and the law should not be ready to seek to fetter business relationships with its own view of what might represent appropriate business conduct, when parties have not chosen, or have not been willing or able, to do so in any identifiable legal terms themselves. These considerations, in my judgment, also make it wrong to afford relief based on estoppel, including relief limited to reliance loss, in the present context.”
“all of the conduct relied on … is explicable on the basis that the parties were acting in anticipation that they would conclude a binding sub-contract that would operate retrospectively. I do not consider that the conduct is clearly and unequivocally consistent with there being in place a concluded binding sub-contract.”
“For present purposes all that need be said is that his judgment [the judgment in the Norwegian American Cruises case] is authority for the proposition that estoppel by convention is not confined to an agreed assumption as to fact, but maybe as to law, that the court will give effect to the agreed assumption only if it would be unconscionable not to do so and that, once a common assumption is revealed to be erroneous, the estoppel will not apply to future dealings.”
“Applying those tests, it is as clear as can be that there was from the inception of the arbitration, and all the way through, an agreed assumption that there was a valid arbitration agreement being on the terms of clause 3 of the printed sub-contract form. That agreed assumption was acted on throughout the arbitration proceedings, right through to the end of the thirteenth day. In my judgment, it would be most unconscionable to allow the defendants to depart from that agreed assumption, seeing that the plaintiffs have incurred substantial costs, both in their preparation for the arbitration and in their pleadings and in interlocutory matters (such as discovery) and in 13 full or part days of hearing, including legal representation, calling of witnesses, etc, in reliance on that assumption. I therefore hold that there is, as the plaintiffs submit, an estoppel by convention in the present case, preventing the defendants from going back on the agreed assumption that a valid arbitration agreement on the terms of cl3 existed.”
“I am not convinced that either [Goff & Jones], or any of the other reported cases cited to us, affords a clear answer to the crucial question of law: On the assessment of a claim for services rendered based on a quantum meruit, may it in some circumstances (and, if so, what circumstances) be open to the defendant to assert that the value of such services falls to be reduced because of their tardy performance, or because the unsatisfactory manner of their performance has exposed him to extra expense or claims by third parties? In my judgment, this question of law is a difficult one, the answer to which is uncertain and may depend on the facts of particular cases.” (2) Bingham LJ said at 57: “But once the existence of any contract was put in issue, on grounds not said to be vexatious, so that Crown was obliged to establish its claim for interlocutory relief on a quantum meruit basis alone, the situation changed. With its contractual foundation undermined, interim certificate number 28 no longer provided a firm basis on which Crown could build its claim. Whether, and to what extent, Amec could rely on the matters previously pleaded as contractual cross-claims to diminish the reasonable remuneration recoverable by Crown became a matter of genuine controversy. Crown has argued, and the judge below accepted, that these matters are wholly irrelevant to the assessment of what reasonable remuneration Crown should recover. It may very well be that they are right and will ultimately be held to be so. But the answer does not seem to me to be clear and obvious.”
“This Agreement is made without prejudice to the contention by [LOR] that there exists between the parties a sub-contract in respect of work carried out by HYL in respect of the Project and the contention by HYL that no such sub-contract exists. [LOR] and HYL entirely reserve their respective positions in this regard and agree that nothing within this Agreement shall be taken to imply any acceptance or otherwise of the other party’s position.”