This is a case which defines what is an offer.
Facts of the Case
The appellants are a company carrying on the business of publishing books and the respondents are a firm of printers in Singapore. Between March 1970 and September 1971, the parties entered into a business relationship regarding the printing of school text books. There are disputes between the parties regarding the ownership of certain film positives used to print the books and bills for printing charges and for producing the film positives.
The appellants paid all the printing charges except a disputed sum of $500 which they claimed to be an overcharge. They also withheld payment of the extra charges for reproducing the film positives because the respondents claimed ownership of these films. The respondents refused to give up their claim for ownership unless the appellant pay another sum equivalent to 80% of the reproduction charges.
Appellants suggested that the respondents could keep the film positives as long as they would continue to print the appellants' books coupled with appellants' assurance to continue to employ the respondents but the respondent still insisted that the film positives belonged to them. Because of this situation, the annual printing contract which the parties were negotiating did not come through and as a result the appellants changed their printers and refused to pay the respondents the agreed reproduction charges. Finally, the respondents sued the appellants claiming the sum of $500 which they alleged was the balance of the printing charges and a further sum of $28,052 as extra charges for reproducing the film positives whose ownership was disputed.
The High Court gave judgment in favour of the respondents on both these sums and therefore ordered the appellants to pay a total sum of $29,552 at 6% interest and costs without at the same time ordering the delivery of film positives to the appellants. Hence the appellants appealed against this decision.
Issues of the Case
whether or not the appellants were bound to pay the disputed sum of $500 to the respondents
whether the respondents were entitled to the payment for the extra charges, that is, the reproduction charges without giving up ownership of the film positives to the appellants.
Judgments of the Court
First Issue
Respondent claimed that there was an undercharge of $500. Appellant claimed that it was an overcharge because the respondent’s calculation does not follow the agreed quoted prices. Under cross examination, the managing partner of the respondent’s firm admitted that his firm overcharged the appellants by calculating with a higher rate per page. Thus, the appellant was not bound to pay the overcharged amount of $500.
Second Issue
Film positives were needed to print the text books but it was not supplied by the appellant. Thus, the respondent would need to make them from existing text books supplied by the appellant. Appellant was charged $28,052 for the film positives. The appellant was willing to pay the sum on the understanding that it belongs to them. However, the respondent insist that they were the owner of the films because it was mentioned in their quotation that all film positives will remain as the respondent’s property.
The respondent would not let go of the ownership unless the appellant pays an extra of 80% of the reproduction cost to them. Respondent argued that the quotations which includes the film ownership clauses were accepted without qualification by the appellant and thus is form part of the contract and they have the ownership on the basis of trade usage.
To determine whether it is part of the contract, the court had to determine whether the quotations constitute binding offers? The court held that:
“An offer is an intimation of willingness by an offeror to enter into a legally binding contract. Its terms either expressly or impliedly must indicate that it is to become binding on the offeror as soon as it has been accepted by the offeree. Yet an examination of all the quotations in this case did not seem to express such intention. They were nothing more than a mere supply of information by the respondents in response to the appellants' inquiry as to the price of books to be printed and their delivery dates.”
It was held that there is offer when the appellant issue each printing order to the respondent. The confirmation letter of the respondent then concludes the printing contract between them. Therefore, the film ownership clause is not part of the contract.
Regarding the basis of trade usage, the court found that it was unlikely that there is a trade usage which the film positives reproduced by printers are their property. The alleged trade usage was insufficiently proved. The respondent failed to show that the alleged trade usage is reasonable. The court took the view that the alleged trade usage seems unreasonable because it conflicts with the ordinary sense of justice commonly understood as reasonable men in that a person who pays for an article or for making it should be entitled to it and not be deprived of its ownership for which he has paid or required to pay.
The appellant is entitled to the ownership of the film positives. Hence, the appeal is allowed with costs and respondents’ claim for the sum of $28,552 and interest is dismissed.
Principles of the Case
An offer is an intimation of willingness by an offeror to enter into a legally binding contract. Its terms either expressly or impliedly must indicate that it is to become binding on the offeror as soon as it has been accepted by the offeree. When a quotation did not seem to express such intention. They were nothing more than a mere supply of information by in response to an inquiry.