BACKGROUND

The parties involved in Tekdata Interconnections Ltd v Amphenol Ltd [2009] EWCA Civ 1209 (19 November 2009) were part of a chain of suppliers of engine control and had been doing business for many years. Tekdata manufactured cable harnesses for internal wiring and required connectors from Amphenol.

CLAIM AND ISSUES

The first “form” was the purchase order generated by Tekdata. This stated that the purchase was to be on Tekdata's own terms and conditions and required delivery 26 weeks from date of order. Tekdata claimed connectors were delivered late and were not fit for purpose or of merchantable quality. Amphenol's purchase order said that the contracts were on the terms of a second “form”, namely its acknowledgement, which it claimed excluded or limited liability for breaches of contract.

FIRST INSTANCE

The earliest date at which a contract could be made was when Amphenol acknowledged the purchase orders. The acknowledgement stated that Amphenol's terms and conditions were to apply. On a traditional analysis, without further documentation and if Tekdata took delivery, they would have applied. However, because of the following reasons, the judge held that the parties always intended Tekdata's terms to apply:

  • The connectors were items of considerable sophistication and any departure from agreed times of delivery or, even more importantly, the quality of degree of materials and workmanship as specified in the purchase order could have "catastrophic consequences".
  • A short time before the purchase orders were concluded, Amphenol had made contractual obligations to the party beyond Tekdata in the supply chain on terms that corresponded largely to those of Tekdata.
  • At no time before Amphenol served its defence did they mention their own terms.
  • Amphenol appealed.

DECISION

The Appeal was allowed. The traditional offer and acceptance analysis must be adopted unless the documents passing between the parties and their conduct showed a common intention that other terms were intended to prevail. This traditional analysis pointed to Amphenol's terms as the ones on which the parties contracted.

In coming to this decision the court found that

  • The judge at first instance had concentrated more on what ought to have happened rather than what did happen.
  • The context of the parties' relationship was important, but the factors relied upon did not justify the conclusion.
  • While delivery times and quality control were essential to the good relationship of the parties, this was true for many commercial relationships and was no more than a background factor.
  • Although some of Amphenol’s actions complied with some of Tekdata's conditions, parties to contracts often do things that they might not strictly be obliged to do.
  • Although Amphenol made no reference to their own terms and conditions until their defence, reasonable businessmen do not necessarily resolve their problems by making legal assertions. The terms of the post-dispute correspondence did not carry the matter very far.

COMMENT

A long term relationship and the conduct of the parties can never be so strong as to displace the result that a traditional offer and acceptance analysis would dictate. It will, however, always be difficult to displace the traditional analysis in a battle of forms case, unless there is a clear course of dealing between the parties.