Legal Advice - Contractual Issue
Discussion
Hi,
A friend has a situation he has asked me to advise on, and being a while since I have been in any similar situation I am not sure if my advice is correct. My initial reaction was that the third party does not have a case, but having doubts and would very much appreciate some opinions and input, prior to him seeking a solicitor's advice.
The situation is as follows:
Company A is friend's company, the customer.
Company B is third party company, the supplier.
Company A has previous business relations with B.
A requests a quote from B. B attends a site survey.
B quotes A a price, which A accepts (over email) and requests more intimate information on the work to be done.
A then requests a modification in the quotation, as the work required has changed.
B requotes, but A is not happy with the price, and informs B that they have obtained quotes elsewhere which are far cheaper. A cancels the order.
B claims that A cannot cancel the order, and wants specific performance, or damages based on the profit element of the quote.
No money has passed between the two parties.
A has offered, as goodwill, a small payment for the site attendance, as B claims that site survey would not have been carried out for free, if they did not believe acceptance was forthcoming. Note that site survey was done to ascertain price, and at that point, nothing was accepted.
My opinion is that there is no contract. There is no consideration, and the quotation was varied by Company B, and this second quotation which was not accepted.
Any thoughts?
Thank you in advance.
A friend has a situation he has asked me to advise on, and being a while since I have been in any similar situation I am not sure if my advice is correct. My initial reaction was that the third party does not have a case, but having doubts and would very much appreciate some opinions and input, prior to him seeking a solicitor's advice.
The situation is as follows:
Company A is friend's company, the customer.
Company B is third party company, the supplier.
Company A has previous business relations with B.
A requests a quote from B. B attends a site survey.
B quotes A a price, which A accepts (over email) and requests more intimate information on the work to be done.
A then requests a modification in the quotation, as the work required has changed.
B requotes, but A is not happy with the price, and informs B that they have obtained quotes elsewhere which are far cheaper. A cancels the order.
B claims that A cannot cancel the order, and wants specific performance, or damages based on the profit element of the quote.
No money has passed between the two parties.
A has offered, as goodwill, a small payment for the site attendance, as B claims that site survey would not have been carried out for free, if they did not believe acceptance was forthcoming. Note that site survey was done to ascertain price, and at that point, nothing was accepted.
My opinion is that there is no contract. There is no consideration, and the quotation was varied by Company B, and this second quotation which was not accepted.
Any thoughts?
Thank you in advance.
You need to provide more info including wording of emails etc. and any terms and conditions supplied. It depend whether a contract was formed around the middle section of the transaction.
You say in the middle "A wanted to cancel the order", if he believed he had an order to cancel then presumably he felt that there was a contract? If he genuinely believes they were still talking about quotes then he had no order to cancel.
It really depends on what was then by and to whom and when.
You say in the middle "A wanted to cancel the order", if he believed he had an order to cancel then presumably he felt that there was a contract? If he genuinely believes they were still talking about quotes then he had no order to cancel.
It really depends on what was then by and to whom and when.
tigger1 said:
If the provider wanted to change the price, isn't this then a new contract - making the original void?
Nope, seems like a variation, not a new contract. So the parties are still tied in and there may be a claim, although my experience of this kind of legal issue is somewhat limited.
maven said:
Hi,
A friend has a situation he has asked me to advise on, and being a while since I have been in any similar situation I am not sure if my advice is correct. My initial reaction was that the third party does not have a case, but having doubts and would very much appreciate some opinions and input, prior to him seeking a solicitor's advice.
The situation is as follows:
Company A is friend's company, the customer.
Company B is third party company, the supplier.
Company A has previous business relations with B.
A requests a quote from B. B attends a site survey.
B quotes A a price, which A accepts (over email) and requests more intimate information on the work to be done.
A then requests a modification in the quotation, as the work required has changed.
B requotes, but A is not happy with the price, and informs B that they have obtained quotes elsewhere which are far cheaper. A cancels the order.
B claims that A cannot cancel the order, and wants specific performance, or damages based on the profit element of the quote.
No money has passed between the two parties.
A has offered, as goodwill, a small payment for the site attendance, as B claims that site survey would not have been carried out for free, if they did not believe acceptance was forthcoming. Note that site survey was done to ascertain price, and at that point, nothing was accepted.
My opinion is that there is no contract. There is no consideration, and the quotation was varied by Company B, and this second quotation which was not accepted.
Any thoughts?
Thank you in advance.
A friend has a situation he has asked me to advise on, and being a while since I have been in any similar situation I am not sure if my advice is correct. My initial reaction was that the third party does not have a case, but having doubts and would very much appreciate some opinions and input, prior to him seeking a solicitor's advice.
The situation is as follows:
Company A is friend's company, the customer.
Company B is third party company, the supplier.
Company A has previous business relations with B.
A requests a quote from B. B attends a site survey.
B quotes A a price, which A accepts (over email) and requests more intimate information on the work to be done.
A then requests a modification in the quotation, as the work required has changed.
B requotes, but A is not happy with the price, and informs B that they have obtained quotes elsewhere which are far cheaper. A cancels the order.
B claims that A cannot cancel the order, and wants specific performance, or damages based on the profit element of the quote.
No money has passed between the two parties.
A has offered, as goodwill, a small payment for the site attendance, as B claims that site survey would not have been carried out for free, if they did not believe acceptance was forthcoming. Note that site survey was done to ascertain price, and at that point, nothing was accepted.
My opinion is that there is no contract. There is no consideration, and the quotation was varied by Company B, and this second quotation which was not accepted.
Any thoughts?
Thank you in advance.
This is the key bit:
The quote was offered, based on an accurate survey and sent to your friends company *he accepted it* and *then* asked for more information.
Then your friends company wishes to change the deal and asks for a different quote as *their* requirements have changed over what was asked for, quoted and accepted.
As far as I can see the essential elements of the offer, consideration and acceptance are there in the quote and email, and I am afraid as far as I can see that was when the contract was formed. Thus the supplier is 'bang to rights' in this issue.
The supplier would have no right to charge for the quotation as of course if the offer was rejected there was no contract in place to pay for the survey if their offer was not accepted, so they have gone about that the wrong way.
However, they could argue that the cost of the survey is included into the total quote offered and was accepted. On those grounds, the supplier can ask for the performance for the contract, and if not the total costs put into the deal which was cancelled as well as the profit element would be the amount of 'damages'.
Sorry, the supplier is right on this one, I would advise for yor friend to go with their quote, as I expect that this is a cheaper way forward than paying someone else plus them to perform the contract.
Thank you all for the replies.
I think as far as the t&c are concerned, having not afforded sight of them myself, my friend mentions that the t&cs state a 25% deposit but does not specifically state that it is required prior to any works commencing.
I was thinking that the requote was a get out for my friend, but I'm not sure if it was a variation of the work requote or additional work, and no change to the original work quoted for.
At the very least, the additional quote is not binding, and only the original quote would be?
Another aspect I looked at was that since it was not a director of the firm that accepted the quote, does this still mean it is binding?
I think as far as the t&c are concerned, having not afforded sight of them myself, my friend mentions that the t&cs state a 25% deposit but does not specifically state that it is required prior to any works commencing.
I was thinking that the requote was a get out for my friend, but I'm not sure if it was a variation of the work requote or additional work, and no change to the original work quoted for.
At the very least, the additional quote is not binding, and only the original quote would be?
Another aspect I looked at was that since it was not a director of the firm that accepted the quote, does this still mean it is binding?
I think he's scrabbling in the dark!!
He could try arguing that the person making the deal didn't have the authority of the company to do so but I think that's just asking for large bills from a litigator.
To me the issue is WHETHER he did make a contract at the beginning and so the new quote was a variation or whether he hadn't actually concluded the contract and the answer to that will be contained in the emails and records of any telephone conversations that exist.
He could try arguing that the person making the deal didn't have the authority of the company to do so but I think that's just asking for large bills from a litigator.
To me the issue is WHETHER he did make a contract at the beginning and so the new quote was a variation or whether he hadn't actually concluded the contract and the answer to that will be contained in the emails and records of any telephone conversations that exist.
maven said:
Thank you all for the replies.
I think as far as the t&c are concerned, having not afforded sight of them myself, my friend mentions that the t&cs state a 25% deposit but does not specifically state that it is required prior to any works commencing.
I was thinking that the requote was a get out for my friend, but I'm not sure if it was a variation of the work requote or additional work, and no change to the original work quoted for.
At the very least, the additional quote is not binding, and only the original quote would be?
Another aspect I looked at was that since it was not a director of the firm that accepted the quote, does this still mean it is binding?
I think as far as the t&c are concerned, having not afforded sight of them myself, my friend mentions that the t&cs state a 25% deposit but does not specifically state that it is required prior to any works commencing.
I was thinking that the requote was a get out for my friend, but I'm not sure if it was a variation of the work requote or additional work, and no change to the original work quoted for.
At the very least, the additional quote is not binding, and only the original quote would be?
Another aspect I looked at was that since it was not a director of the firm that accepted the quote, does this still mean it is binding?
The deposit issue is an entirely different kettle of fish to the offer and acceptance *unless* they have a particularly wayward set of T&Cs which state that no contracts are binding without it. Unlikely.
Whether it is a variation to the work or additional work, the contract *as it was when is was accepted* is binding.
There is no legal reason why it must be a director to do business on behalf of the company. If both sides believed that a contract would be formed then there is no problem. The onlt type of getout in this situation would be is if your friend has worked with the company before, they may have supplied *their* T&Cs - I often get this with govt depts even though I am a supplier. These may state that contracts are only formed through particular methods of contact or by the signature for particular staff.
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