High Court considers whether email plus attachment was an acceptance or counter-offer

In an appeal from the County Court the High Court has confirmed that a purported acceptance of a settlement offer was actually a counter offer. Party A offered to settle a dispute before an appeal hearing in return for the sum of £90,000 subject to its offer being accepted by a specific date and the monies being paid on a specific date. Party B emailed a response which started with the introductory phrase "[Party B] accepts your offer." However, Party B also attached a draft consent order which specified a date for payment which was several weeks later than that stipulated by Party A.

Party B claimed that it had accepted Party A's offer; its initial statement had been unequivocal, the draft order was merely a proposed formal document which could have been varied or rectified. If the draft consent order had not been attached or had been sent later then, from the email alone, it would have been clear that Party A's offer was accepted. The court rejected this argument, holding that there was no consensus on a key part of the package offered by Party A and so Party B's email was a counter offer.

The court also commented that the County Court judge had been wrong to ignore communications other than the offer and purported acceptance. The judge cited the Supreme Court judgment in RTS Flexible Systems Ltd v Molkerei Alois Muller GmbH [2010] UK S13 which endorsed the principles given by Lloyd LJ in Pagnan SPA v Feed Product Ltd [1987], in particular that "In order to determine whether a contract has been concluded in the course of correspondence, one must first look to the correspondence as a whole...”. In this case correspondence between the parties after the purported acceptance supported the view that it was in fact a counter-offer.

The case is a useful illustration of key aspects of contract formation.

Case: Gibbs v Lakeside Developments Ltd [2016] EWHC 2203 (Ch), 12 July 2016 (Westlaw).