Contract Still Binding Even Though It Referred To A Formal Contract To Follow

Immingham Storage Co Ltd v Clear PLC [2011] EWCA Civ 89

Immingham provides storage facilities for petroleum and petrochemical products at its terminal at Immingham. Clear was engaged in trading commodities, including fuel. Clear entered into negotiations with Immingham for the storage of ultra low sulphur diesel. On 19th Dec 2008, Immingham sent a quotation to Clear which was stated to be "subject to board approval and tankage availability". All key contractual terms were included and there was a statement that other terms would be "as per our General Storage Conditions". The final sentence of the quotation was "A formal contract will then follow in due course". A copy of the General Storage Conditions was attached. On 5th Jan 2009, Clear faxed a copy of the quotation countersigned by Clear to Immingham who responded confirming receipt and saying that it would now seek its own internal board approval and availability of the necessary capacity. On 9th Jan, Immingham sent an email stating "We are delighted to accept your offer..... in further confirmation of the above, our full contract for this business will now be raised over the next few days by our Head Office and sent for your signature and return". Contracts were sent to Clear but, in the event, were never signed and returned by Clear – because Clear was unable to source the appropriate fuel for the storage. Immingham brought an action against Clear for non-payment of invoices, on the basis that a contract was brought into existence by its acceptance of Clear's offer on 9th January. Clear argued that its return of the quotation was not an offer capable of acceptance because of the reference to a subsequent formal contract. And even if it was such an offer, Immingham had not accepted it because it stated that its full contract would now be raised.

The Court of Appeal agreed with the High Court and held that a contract had come into existence. The 18th Dec quotation contained all the relevant terms. The only...