Immingham Storage Co Ltd v Clear plc

[2011] EWCA Civ 89

Immingham provide storage facilities for petroleum and similar products. Clear, was a commodities trader. In October 2008, Clear made enquiries of Immingham regarding diesel storage space. Following a site visit, the parties exchanged a series of emails regarding storage availability and likely costs. Significantly, on 19 December 2008 Immingham emailed Clear offering storage space from 1 May 2009 and attaching a quotation for Clear to sign. Immingham requested Clear’s confirmation by 3 January 2009. The quotation which was headed "Subject to board approval and tankage availability" set out various essential details stated that "all other terms will be as per our "General Storage Conditions" Version 2008 which shall be deemed to apply to this quotation". The final sentence of the quotation was "A formal contract will then follow in due course". The quotation was signed by Immingham and contained a space for signature by Clear under the words "we hereby accept the terms of your quotation subject to your Board approval". The General Storage Conditions version 2008 was attached to the email.

On 5 January 2009, Clear emailed Immingham confirming that it wished to proceed and that the quotation had been signed on behalf of Clear and returned by fax. Immingham replied that day confirming receipt of the fax and advising that Board approval would be sought and availability of storage capacity would be investigated. On 9 January 2009, Immingham emailed Clear under the subject heading "Contract Confirmation" accepting Clear’s offer and stating that a full contract would be sent for signature and return. Immingham sent the formal contract to Clear but it was never returned. Clear was unable to source the appropriate fuel for storage and made no delivery to Immingham. Immingham invoiced the monthly storage charges but did not receive payment, with Clear denying the existence of a binding contract on the basis that it had not signed the formal contract. The issue for the court was whether a contract was made by the acceptance in Immingham’s email of 9 January 2009 of an offer constituted by the return on 5 January 2009 of the quotation signed on behalf of Clear, notwithstanding the inclusion in the quotation of the sentence "A formal contract will then follow in due course"?

The CA upheld the trial judge’s decision that a binding contract was concluded by Immingham’s email of 9 January 2009. The CA held that the quotation was expressed to be subject to two conditions only: the approval of the Board and tankage availability. The quotation signed by Clear was an offer which was accepted by Immingham. These conditions were consistent with an intention that once satisfied and once Immingham communicated its acceptance, a contract would exist between the parties on the terms of the quotation. The quotation was not stated to be "subject to contract" or subject to execution of a formal agreement. The provision that a "formal contract will then follow in due course" did not indicate that Immingham’s acceptance of the signed quotation would be no more than an agreement subject to contract. This was "a mere expression of the desire of the parties as to the manner in which the transaction already agreed to, will in fact go through".