OFFER AND ACCEPTANCE HELD TO BE OF THE ‘HIGHEST IMPORTANCE’ WHEN DECIDING WHETHER OR NOT A CONTRACT HAS BEEN CONCLUDED

Tesco Stores Ltd v Costain Construction Ltd [2003] EWHC 1487 (TCC); [2003] All ER (D) 394 (July)

In Tesco Stores Ltd v Costain Construction Ltd [2003] EWHC 1487 (TCC); [2003] All ER (D) 394 (July) Judge Seymour QC held that a contract had not been concluded between an employer and a contractor on the employer’s terms notwithstanding the fact that the construction work had been completed. In so concluding, Judge Seymour attached considerable importance to the need to establish an offer and an acceptance. Further, the fact that parties had behaved towards each other in anticipation of the conclusion of a contract between them in the manner which would have been appropriate if they had in fact concluded the contract concerning which they were in negotiation was held to be of little value in resolving the issue whether there was in fact a concluded contract. Neither did the fact that the claimants had sent to the defendants a letter of intent establish the existence of a contract. Judge Seymour also held that the defendants were not estopped from denying the existence of a contract between the parties on the claimants’ terms. Finally, it was held a builder who undertakes by contract to perform a service for another upon terms that the service would be performed with reasonable skill and care, also owed a duty of care to like effect to the other parties to the contract that extended to not causing economic loss.