Problem: We are general building and M&P contractors that focus on maintenance and repair, with the majority of the work being direct with the end user.
A little while back we were approached by a well known high street brand who where seeking a contractor to carry out general maintenance work of its retail shops in the East Midlands, initially for a term of 18 months.
We subsequently provided a quotation, which essentially was a schedule of rates against various descriptions of work, with different prices against the same work (depending upon the required attendance time).
Included in our quotation was reference to our terms and conditions, which is contained on our website, and we provided a link to this in the quotation. A clause in our terms and conditions state that any purchase order from the employer does not override our standard T&C’s.
After a [virtual] meeting, the client decided to go with us and days later, we received our first purchase order to carry out some general maintenance and improvement to a shop in Leicester. The order also referred to the company’s printed T&C’s which accompanied the order.
A couple months passed and we have carried out a number of general maintenance work for this client. The problem is however, when we have come to chase payment, we have been informed by the client that the terms are 90 days, whereas our payment terms state 30 days. We have pointed this out to the financial director of the client, and have referred to our T&C’s, with the reply being that it is the company’s T&C’s that take precedence.
Whose T&C’s therefore take precedence? 90 days is far too long. If the client’s T&C’s take precedence, there are a number of other terms that concern me, including the warranty period and a discount for early payment!
Response: Your scenario is quite common.
For a contract to be binding, there must be certain legal requirements present, including an offer (that is capable of being accepted), and an unequivocal acceptance of that offer. Where one party makes an offer and the other party responds by making a counter-offer (and the difference between the 2 offers need only be subtle), the initial offer is destroyed and incapable of being accepted (it can be re-offered).
This can go on and on (a counter-counter-offer to the counter-offer etc), until an offer is unequivocally accepted. However, the acceptance does not need to be in writing – it can be by conduct.
You initially forwarded your offer which also brought your own T&C’s to your client’s attention (by referring your client to your website). This would have been satisfactorily if your client had either stated that it had accepted your offer (without caveats), or had issued its PO without its own T&C’s.
From your outline, you have stated that after you had submitted your quotation, you then had a meeting with the client. Was any minutes taken? Did the client state that it had agreed to your offer without mentioning its own T&C’s? If so, a binding contract may have arisen from the meeting, and if this is the case, then your client’s T&C’s will not be binding.
If your client did not unequivocally accept your offer at the meeting, then the initial PO that was issued to you, which also attached its T&C’s, are probably the T&C’s that are binding. This is because the PO was an offer, and if you then went to site and started carrying out the work, your conduct is the acceptance.
© Michael Gerard 2021
The advice provided is intended to be of a general guide only and should not be viewed as providing a definitive legal analysis.
Author background
Michael is a Solicitor, Chartered Builder & Registered Construction Adjudicator, and is a director at Michael Gerard Law Limited, a solicitors practice regulated by the SRA.