Specialist Insulation Limited v Pro-Duct (Fife) Limited [2012] ScotCS CSOH 79. The contractor's terms provided for disputes to be adjudicated: the supplier's terms did not.
The supplier referred a matter to adjudication. Objection was raised by the contractor on the basis that it was the supplier's terms that applied to the contract. In the dealings, the supplier had sent its quotation subject to "its standard terms and conditions of trading". The contractor had then issued a purchase order and at the same time sent a document called a "material supply only subcontract agreement" which was executed by the contractor, but not by the supplier.
The Scottish Outer House of the Court of Session held that the supplier's terms applied. The judge did not use the "last shot" doctrine. Instead he referred to the Tekdata interconnections v Amphenol case (an English Court of Appeal case from 2009) and applied the dictum that the last set of terms exchanged (here the contractor's) need not prevail if an agreement to that effect was necessarily to be inferred from the circumstances of the case. An objective analysis of what the parties intended should be carried out. The relevant circumstances here were:
- The supplier's quotation specifically incorporated its standard conditions whereas the contractor's quotation made no reference to its terms.
- The supplier's standard terms contained a statement that they applied to the exclusion of any other conditions.
- The contractor's agreement provided for execution of both parties, but the supplier had not signed them.
- The contractor's terms contained terms that related to a construction contract, not a sale of goods.
In the light of this, the judge found that by taking delivery of the goods without querying the supplier's non-signature of its own document, the contractor must be taken as having accepted the goods on the basis of the supplier's standard terms.
Comment. 2 lessons here. The last shot principle does still apply, but can be overturned - in this case by lack of signature and inappropriateness of certain terms. Secondly, from a practical point of view, whilst it may give certainty for a party to insist that his terms are countersigned by the other party, failure of the other party to countersign may mean that it is the other party's terms that prevail. At the very least there should be statement that performance will also constitute agreement to the terms. In either case, good contract administration is essential if a party is to ensure that its terms prevail.
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