04/08/2025
A recent High Court case has examined offer and acceptance in circumstances where both parties sought to rely on their standard terms and conditions.
The question of which terms applied was considered as a preliminary issue in the case of Volac International Ltd v IEP Technologies Ltd [2025] EWHC 1490 (TCC).
The background to the case was that Volac owned and operated a food products manufacturing plant, which included a spray dryer protected by an Explosion Suppression System (‘ESS’). IEP had been engaged to maintain, upgrade and expand the ESS.
Following a malfunction to the ESS in November 2015 causing significant damage to the spray dryer, including moderate explosion damage and significant implosion damage, Volac commenced a claim for substantial damages for alleged breach of contract and negligence against IEP.
Contract Formation
On 17 April 2014, IEP provided a quotation for £169,000, which states that IEP’s standard terms and conditions would apply.
IEP subsequently provided three more quotations – all of which referred to its standard terms and conditions.
In response to a quotation dated 15 September 2014, Volac responded to say that it would like to “get things moving”, and subsequently sent IEP a Purchase Order number on 29 September 2014 for one part of the ESS only for £28,000 plus VAT. The Purchase Order referred to the Volac standard terms and conditions, which it stated would be “made available on request”. There was then a further exchange of emails around technical details.
On 22 October 2024, Volac issued a further Purchase Order for another part of the ESS, which it stated superseded the previous order. On 31 October 2024, IEP thanked Volac for the orders, and stated:
“Order placed in accordance with IEP standard terms and conditions”.
Finding
The Court found that the contract was formed when Volac sent the Purchase Order on 29 September 2014. The parties had both accepted the need to “get things moving”, and the subsequent discussions on technical details were “discussions which inevitably occur in a complex contract like this, but after the contract has been made”.
Accordingly, IEP’s statement of 31 October 2024 was too late: the contract between the parties had already been formed.
Conclusion
This case provides an interesting reminder of the importance for parties in seeking to rely on their standard terms and conditions to ensure that their terms are incorporated and that they do not lose in a “battle of the forms”.
This requires commercial teams to understand the risks around accepting purchase orders without carefully checking the provisions and being clear as to the steps to take to ensure that the terms and conditions are incorporated.
This scenario can be avoided by insisting on a written acknowledgement or an order form being signed to confirm that the standard terms apply.
