Offer, acceptance, two wrongs, but is anyone right?

[S11Steve]

One of my customers and one of my suppliers are currently at loggerheads, and neither is backing down at the moment. We have been asked to mediate, and give what we think is a workable solution, but neither want to move. We are not involved in the transaction, but we are mutual to both parties and considered independent.

In June, the customer orders 3 "widgets", and adds a "doofer" onto each one. The supplier only has widgets, so buys in the doofer but gives the customer a quotation for a total price. Customer is happy, pays invoice, has 3 widgets with doofers delivered. Each combined widger/doofer unit is around £25k

4 Months later, customer asks for "another 5 like the last ones please" - literally those words.

Supplier raises a quote for 5 widgets, and 5 doofers, but this time the doofers he buys in are more expensive.
Customer doesn't notice this, but supplier doesn't highlight it either. Customer accepts and signs quotation.

The first widget with doofer is available for delivery, and supplier sends across an invoice, BUT it is at the same price as the June invoice, not the higher quotation price.

Customer pays this invoice as it is the same as the June invoice, but supplier spots the error after the payment was made and is now refusing to release the widget, but is also refusing to return the money and cancel the sale. The difference between June price and new price is about £1500 per widget.


I can see that both parties have made an error at different points, but neither wish to back down.
In the terms of invitation to treat and acceptance, where does the incorrect paid invoice lie within contract law?

[S11Steve]

Durzel said:

Whoops yeah, I misread that as the quote having the original figure on. Customer should've read it properly then before signing. The invoicing (imo) is an administrative mistake.

I agree that the customer should have been more vigilant when signing the quote (which did have the higher price, although this wasn't made clear to him), but is the supplier right to withhold paid funds for the invoice, even though it was incorrect?

[S11Steve]

@Mill Wheel - no deposit was paid, but strangely enough there is rarely a deposit taken in these type of transactions. Neither parties are dependent upon the other, the customer and supplier have a relatively well-established relationship, but we have a strong relationship with both, hence why we have been asked to mediate.

With regards to being stuck with the widgets, our company has offered to find another buyer for them, at the full price, if the order is cancelled. I think that this has been rejected, but I'm not sure right now. Alternative widget/doofer combinations are available, and at varying prices, but it depends on lead times and how desperate the customer is to get hold of them as they are generally all built to order.

@JustinP1 - Thank you for the clarity. It's good to know what the black and white/legal view is on this, but we are aware of the commercial decisions as well. I fear that is not what the customer wants to hear, but whether it is worth them spending £xxxxx on legal fees to get their £25k back, only they can make that call.

I think this may rumble on for a few more days...

[S11Steve]

Correct - B2B sale.

I think the customer is pushing towards misrepresentation, and I can sort of see his point, as maybe the supplier should have been more open/clear about the change in price.

I'll have a conversation with both on Monday, a few of us are mulling over possible solutions this weekend so maybe we can keep both parties feeling they have won over on the other, even if they never speak to each other again!