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Brogden and Others v Metropolitan Railway Company (1877) HL
B, the defendants, had been supplying coal to the plaintiffs, M, since the beginning of 1870. On 18 November 1871, B requested a price rise and a new contract. At a meeting on 19 December 1871, M gave to B a draft contract with blank spots for specifics such the date and the name of the arbitrator. B filled in the gaps, made some other modest changes and signed the draft contract. On 21 December, B’s representative returned the contract to M with a note that concluded ‘If you have anything further to communicate letters addressed to “Tondu” will find me’. This arrived M at whose office it was placed in a drawer, used for holding contracts, where it remained Offer and Acceptance 11 until a dispute developed on 7 November 1872. During 1872, B provided coal to M from the date of commencement of the draft contract, 1 January 1872, at the new price as indicated in the draft contract, often up to but never exceeding 350 tons per week, which was the maximum authorized by the draft contract.
Of the several letters which traveled between B and M during the year, Lord Cairns LC commented
: …having read with great care the whole of this correspondence, there appears to me clearly to be pervading the whole of it the expression of a feeling on one side and on the other that those who were ordering the coals were ordering them, and those who were supplying the coals were supplying them, under some course of dealing which created on the one side a right to give the order, and on the other side an obligation to comply with the order.
However, M maintained that, in the lack of acceptance by M of B’s offer, there was no contract.
Held (I) There was a binding contract upon the conditions of the uncompleted draft contained in M’s drawer.
Per Lord Cairns LC: …there having been clearly a consensus between these parties, arrived at and expressed by the document signed by [B], subject only to approbation, on the part of the company, of the additional term…with regard to an arbitrator, that approbation was clearly given when the company commenced a course of dealing which is referable in my mind only to the contract, and when that course of dealing was accepted and acted upon by [B] in the supply of coals.
Per Lord Hatherley, ‘the arrangement was consummated when the first coals… were invoiced at the differing price, and when that differing price was accepted and paid’.
(II) Neither M’s silence in answer to B’s agent’s letter of 21 December 1871 nor any just mental or private acceptance by M would have finalized the contract. Per Lord Blackburn, ‘when you come to the broad proposition…that a simple acceptance in your own mind, without any communication to the other party, and expressed by a mere private act, such as putting a letter into a drawer, completes a contract, I must say I differ from that’.
B, the defendants, had been supplying coal to the plaintiffs, M, since the beginning of 1870. On 18 November 1871, B requested a price rise and a new contract. At a meeting on 19 December 1871, M gave to B a draft contract with blank spots for specifics such the date and the name of the arbitrator. B filled in the gaps, made some other modest changes and signed the draft contract. On 21 December, B’s representative returned the contract to M with a note that concluded ‘If you have anything further to communicate letters addressed to “Tondu” will find me’. This arrived M at whose office it was placed in a drawer, used for holding contracts, where it remained Offer and Acceptance 11 until a dispute developed on 7 November 1872. During 1872, B provided coal to M from the date of commencement of the draft contract, 1 January 1872, at the new price as indicated in the draft contract, often up to but never exceeding 350 tons per week, which was the maximum authorized by the draft contract.
Of the several letters which traveled between B and M during the year, Lord Cairns LC commented
: …having read with great care the whole of this correspondence, there appears to me clearly to be pervading the whole of it the expression of a feeling on one side and on the other that those who were ordering the coals were ordering them, and those who were supplying the coals were supplying them, under some course of dealing which created on the one side a right to give the order, and on the other side an obligation to comply with the order.
However, M maintained that, in the lack of acceptance by M of B’s offer, there was no contract.
Held (I) There was a binding contract upon the conditions of the uncompleted draft contained in M’s drawer.
Per Lord Cairns LC: …there having been clearly a consensus between these parties, arrived at and expressed by the document signed by [B], subject only to approbation, on the part of the company, of the additional term…with regard to an arbitrator, that approbation was clearly given when the company commenced a course of dealing which is referable in my mind only to the contract, and when that course of dealing was accepted and acted upon by [B] in the supply of coals.
Per Lord Hatherley, ‘the arrangement was consummated when the first coals… were invoiced at the differing price, and when that differing price was accepted and paid’.
(II) Neither M’s silence in answer to B’s agent’s letter of 21 December 1871 nor any just mental or private acceptance by M would have finalized the contract. Per Lord Blackburn, ‘when you come to the broad proposition…that a simple acceptance in your own mind, without any communication to the other party, and expressed by a mere private act, such as putting a letter into a drawer, completes a contract, I must say I differ from that’.
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