AEG (UK) Limited Vs Logic Resource Ltd

Group 1
Venkatram, Guarav, Prabeer,
Gopika, Indraneel

Case Details
Logic Resource Limited (Logic) was to supply 49 CRT to its Customer in Iran as
per defined specification. Logic (Purchaser) placed a Purchase Order on AEG
(Supplier), the manufacturer, alongwith the specifications. AEG accepted and sent a
confirmation order with Terms and Conditions of sale on reverse of confirmation
order. The T & C included :
The Purchaser shall return the defective parts at his own expense to the Supplier
immediately upon request of the latter. The Purchaser shall pay to the Supplier the
amount of the cost (as certified by Supplier)of any tests of the goods in respect of
which the Supplier does not admit liability under this warranty and the Suppliers
liability in any event be limited to repairing or issuing credit at his option for any
goods which are returned by Purchaser within aforesaid period

AEG knew the goods/CRTs were for exports to sub-buyer in Iran and after
manufacture, handed them to a shipping agent to take the consignment to Iran.
In Iran, the CRTs were found defective with pins longer than specified and could
not be fitted/assembled as per requirement. The CRTs were required to be
transported back to AEG for repairs.
Logic has demanded cost of freighting goods/CRTs, 4230, back from AEG. AEG
refused in accordance to the terms of its confirmation order .

Analysis
Question : Why were the terms sent by Seller/Supplier not counter offer? What
steps can be taken to prevent such terms coming with the documents from the
Seller, like vouchers, receipts, product manuals etc. not becoming binding
Analysis
Logic purchased the goods from AEG based on offer/price given by AEG. The
Purchase Order of Logic was a conclusion of Contract between the two firms which
was agreed by both. The Confirmation Order sent by AEG, with additional Terms
was not part of the original acceptance of Contract. It was similar to
tickets/receipts issued by seller post acceptance of contact. The Terms on the
Confirmation order regarding liability of Purchaser to bear the cost of freight for
bringing back the defective goods, were not binding as these came after the
original Contract. Further no reasonable steps were taken by AEG to draw the
attention of Logic to these terms mentioned on confirmation order, to claim them
as part of the contract between them.
The term requiring the Purchaser/Logic to bear the cost of freight for remedying
the defective goods is considered as not incorporated in the original contract.
The term was not a counteroffer as it came after the Contract.
To make such terms on vouchers/ receipts/tickets binding, the Seller has to bring
term conditions to the notice of the Purchaser with a sufficient notice.