Court: Court of Appeal (Civil Division)
Judgment Date: 19 November 2009
Where Reported: [2009] EWCA Civ 1209; [2010] 2 All E.R. (Comm); 302 [2010] 1 Lloyd’s Rep. 357
Legal Issue in Tekdata Interconnections Ltd v Amphenol Ltd
The legal issue in Tekdata Interconnections Ltd v Amphenol Ltd revolved around the determination of the contract terms between the parties and whether the judge was correct in analysing the parties’ relationship as a whole when establishing the contract terms.
Specifically, Tekdata Interconnections Ltd v Amphenol Ltd is concerned which set of terms and conditions (the buyer’s or the seller’s) were legally binding in the contracts formed between the parties.
Material Facts in Tekdata Interconnections Ltd v Amphenol Ltd
The case involved Tekdata, a manufacturer of cable harnesses, and Amphenol, a supplier of connectors.
The dispute arose from conflicting terms in the purchase order and the acknowledgment of the purchase order.
Tekdata claimed that Amphenol breached the contract by delivering late and substandard products.
The disagreement stemmed from the terms of the purchase order and the acknowledgment, with each party asserting that their terms should prevail.
Judgment in Tekdata Interconnections Ltd v Amphenol Ltd
The Court of Appeal held in favour of Amphenol, ruling that the traditional offer and acceptance analysis should have been applied.
The court found that the parties had contracted on Amphenol’s terms, as the purchase order from Tekdata was considered an offer, and Amphenol’s acknowledgment was a counter-offer, which Tekdata accepted by receiving the delivery.
The decision overturned the trial judge’s ruling in favour of Tekdata.
The Reason for the Decision in Tekdata Interconnections Ltd v Amphenol Ltd
The Court of Appeal’s decision was based on the traditional offer and acceptance analysis, which determined that the parties had contracted on Amphenol’s terms.
The court emphasised that the judge should have focused on the objective intention of the parties and not on what they thought should have happened.
The court also highlighted that in ‘battle of the forms’ cases, the focus should be on what the parties objectively intended at the time of contract formation, and not on their subjective beliefs or post-contract correspondence – see Butler Machine Tool v Ex-Cell-O Corporation (1979).
The court found that the judge’s reliance on the overall relationship and post-contract correspondence was not sufficient to displace the traditional offer and acceptance analysis.
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.
Legal Principles in Tekdata Interconnections Ltd v Amphenol Ltd
The case reaffirmed the legal principle that in ‘battle of the forms’ cases, the traditional offer and acceptance analysis should be applied unless the documents and conduct of the parties show a common intention for different terms to prevail.
It emphasised the importance of objectively determining the parties’ intention at the time of contract formation and not relying on post-contract correspondence.
The decision highlighted the significance of clear and definite terms in contract formation and the application of the traditional offer and acceptance analysis in commercial relationships to promote certainty and effective commercial dealings
