Incorporation of Documents - Building Contract - page 34

Held: The defendants' order was a counter-offer which killed the plaintiffs' offer and which
had been accepted by the plaintiffs in proceeding to carry out the works. Accordingly
there was no incorporation in the contract of clause 7 or any other provision of the
plaintiffs' quotation.
MERVYN DAVIES J: The plaintiffs submitted that the Goodman order dated 20 June 1985 was
not such a counter-offer as killed the original offer made by Sauter on 10 April 1985. He
referred to Butler Machine Tool v. Ex-Cell-O Corporation (1979), suggesting that on an exami-
nation of the 'offer' and 'counter-offer' there was no great discrepancy between them; the
principal differences being that the offer to install (rather than to supply and to install) was
refused and that the price was put at £32,715 instead of £33,555. He pointed, too, to the fact
that the specification for the main contract with PSA referred expressly to another sub-
contract and the terms which were to apply to such other sub-contract, whereas there was in
the specification no such reference to the Sauter sub-contract. He relied as well on some
unchallenged evidence which reads:
The terms and conditions of the Main Works Contract are wholly inappropriate in the
context of the Supply Contract with which the plaintiffs were concerned.
I see the force of [the plaintiffs'] submissions. Nevertheless, I see that the approach to the
problem before me has been set out by Lawton LJ in the Butler case. Adopting that approach,
I see that the Sauter offer dated 10 April 1985 is met on 20 June 1985 with an 'order' from
Goodmans which desires Sauter to supply (but not to install) certain equipment at a price
2½% below the Sauter price. Those points are, in my view, quite neutral. But then there are
the words 'Terms and Conditions in accordance with Main Contract GC/Works/1 Edition 2
plus Amendment No 4 (see Form of Contract attached)'. The 'Form of Contract' refers to the
general conditions of the main contract and to certain other matters. To my mind the words
quoted plainly intimated to the plaintiffs that the 'order' was an offer to contract on the terms
and conditions mentioned, i.e. not on the Sauter terms and conditions. What was offered was
a sub-contract with a relationship between Goodmans and Sauters such as to be consistent
with the terms of the main contract; so that there should be no conflict between the main
contract and the sub-contract: see Brightside v. Mitchell Construction (1975). I conclude that
Goodmans were making a counter-offer which killed the Sauter offer. Sauters implicitly
accepted the counter-offer by proceeding to execute the Goodmans' order. Accordingly, there
was no incorporation in the contracts of clause 7 or any other Sauter condition.
Both counsel made submissions on the footing that a possible construction of the docu-
ments was that while GC/Works/1 ('the GC conditions') was incorporated into the Sauter/
Goodman contract, there was also incorporated the Sauter conditions insofar as the Sauter
conditions were not inconsistent with the GC conditions. In that event [counsel] for the
plaintiffs conceded that the GC conditions would prevail. I proceed to consider the matter on
that footing, i.e. that both sets of conditions are incorporated with the GC conditions prevail-
ing in case of inconsistency. It seems to me that on this footing condition 7 cannot have any
operation. I have already set out condition 30(2)(a) of the GC conditions. Sauter knew of this
condition, or had an opportunity of knowing the condition, at least from the time when they
received the Goodman order dated 20 June 1985; that order expressly referring to the GC
conditions. Thus Sauter must be taken to have known that Goodmans were under an obliga-
tion to the PSA to procure a vesting in themselves of such materials as they (Sauter), the
sub-contractor, delivered to the site. True it is that Goodmans did not expressly exact from