408. Proton Energy Group SA v Orlen Lietuva [2013] EWHC 2872 (Comm)

Contract formation – binding contract coming about despite lack of agreement on all terms

 The facts

 A 3-page email headed “Firm offer on delivery of ABT 25kt of crude oil mix” was sent by sellers to buyers.  The email offered to sell 25 000 mt of product +/- 10% at the seller’s option, CIF Butinge, Lithuania.  The offer warranted the product to be of European origin and set out a number of terms including “UK Law, London Courts and all other terms and conditions as per Seller’s standard CIF contract”.  It was stipulated that the offer would be open for acceptance until close of business on the day of the email.

 Buyers replied stating that the laycan would be confirmed, that a documentary letter of credit was acceptable but that the text would have to be confirmed by buyers’ treasury department and that there might be “small changes” in the discount depending on the final contract conditions.  Sellers replied stating “Contractual price is fixed as per the confirmed offer.  All other contractual terms not indicated into the offer shall be discussed and mutually agreed between the parties on contract negotiations”. 

 Buyers replied on the same day saying simply “confirmed”.

 Thereafter sellers sought and obtained buyers’ technical acceptance of the carrying vessel.  Buyers also settled on the laycan period.

 In further negotiations, sellers attempted to reduce the volume of the product offered to which the buyers did not agree.

 Buyers refused to sign the draft written agreement prepared by sellers and terminated negotiations.

 Findings

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