Facts[]
On September 19, 1977 St. Anne-Nackawic Pulp & Paper Co. Ltd. (St. Anne) sent “A Request for Quotation” to Tywood which set forth the goods required. On the reverse side were thirteen “Terms and Conditions” none of which containe d a clause regarding arbitration.
On September 26 Tywood replied with a quotation and on the reverse were their twelve “Terms and Conditions of Sale”, again none of which contained a clause regarding arbitration. The twelfth condition stated that no modifications of the terms would be recognized.
There were subsequent telephone and telex communications between parties and on November 7 Tywood submitted a revised proposal, with same "Terms and Conditions of Sale".
On January 6, 1978 St. Anne sent a purchase order with new "Terms and Conditions", the nineteenth condition stipulating that any controversy shall be settled by arbitration. The order included instructions that Tywood should mail an acceptance copy of order and give the shipment date.
On July 3 another identical purchase order was sent.
Neither of the above purchase orders were signed by Tywood, however the goods were delivered. Tywood brought an action for the price of goods sold and St. Anne moved to stay action stating the contract stipulated disputes would go to arbitration instead.
Issue[]
Under whose conditions was the contract formed?
Decision[]
Application for stay dismissed, Tywood's terms prevail.
Reasons[]
Under the classical model, St. Anne's contract would hold. Similarly under either a first shot or a last shot model, St. Anne would prevail. Grange, however, takes an interventionist tack. He wants to prevent inefficiency by working out what he thinks is a reasonable agreement between the parties. Tywood imposed non-arbitrable conditions when they quoted initial price and never acknowledged St. Anne's terms. The defendant tried to smuggle in arbitration terms and did not complain when the purchase orders were not returned. The conduct of the parties indicates both parties were interested only in the specifications and the price and that consummation of the business deal was paramount for the parties.
Ratio[]
- If there is a discrepancy look to the essence of the contract.
- One cannot sneak terms into contracts without proper notification.
- Look to actual conduct of business (do people really read the terms?)
- Represents a move away from classical contracting model to reasonable contracting.