FIRING THE LAST SHOT IN A CONTRACTUAL DISPUTE
– Chazanne Grobler
Most contracts come about after very long deliberations and negotiations. What happens in the instance where the contracting parties, after various offers and counter-offers, start executing without signing a contract? Was there a meeting of the minds to determine that a contract has been concluded?
In the recent Supreme Court of Appeal case of Van Huyssteen NO and Another v Mila Investment and Holding Company (Pty) Ltd the Court applied the doctrine of quasi-mutual assent. The Respondent, Milla Investments and Holdings alleged that the Appellants had underpaid their rental in terms of a lease agreement. The question arose as to which lease agreement was being applied. Milla Investments argued that after sending the original offer to lease, the Appellant had effected certain changes, firing the last shot. The last shot, as was argued, had won the battle.
During the “battle of the forms” a counter-offer, or the firing of the last shot, does not necessarily win the battle. The last shot will only win the battle, i.e. the doctrine of quasi-mutual assent can only be applied, when the following three (3) conditions are met:
- The one party (Seller or Lessor) must present his or her ‘printed conditions’ in such a manner as to draw the attention of a reasonable person in the position of the Buyer or Lessee;
- The Buyer or Lessee must then present his or her ‘printed conditions’ (the amended offer) in the same manner;
- The Seller’s (Lessor’s) action after receiving the Buyer’s (Lessee’s) conditions must give the Buyer (Lessee) reasonable belief that the Seller (Lessor) is contracting on the Buyer’s (Lessee’s) conditions.
Usually if one party wishes to enter into a contract on certain terms and the other party wishes to enter into a contract on a different set of terms, there is no contract. The parties do not possess the necessary animus contrahendi, or intention to contract. An exception to the rule is of course the application of the doctrine of quasi-mutual assent as described above, where the conduct of a party proves that he or she has entered into the contract.
In the abovementioned case taking into consideration the evidence presented, the Court held that the Respondent (Plaintiff) had acted in terms of its original offer. The Appellant might have fired the last shot, but the facts could not have led the Appellant to believe that the Respondent has assented to the Appellants’ contractual terms. Should a court find that the parties never concluded an identifiable contract, an order for restitution or payment of a fair price could be appropriate. Contracting parties should ensure that both parties are in agreement as to which contract or final terms are being followed.
This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice.