Butler Machine tool v Ex-Cell-O Corporation, Facts, Criticism

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This case is concerned with the offer and acceptance chapter in contract law

Facts of Butler Machine tool v Ex-Cell-O Corporation

Butler the defendant used to sell machine tools. Ex-cello the claimant wanted to buy from Butler. Butler Sent their terms to Ex-cello along with a price variation clause .

Ex-cello responded by sending their own terms to butler and their terms didn’t included a price variation clause but it contained a tear-off slip which was to be signed. Butler signed that slip and returned the slip together with the letter containing the seller terms.

Issue:

Whether the contract was concluded on Butler or Ex-cello terms?

Decision:

As the court held that the contract was concluded on Ex-cello terms . As when the butler was sent him the offer with the prize variation clause it was not accepted by the Ex-cello

But The Ex-cello sent him a counter offer, which terminated the original offer of Butler and included a tear-off slip . Butler made the acceptance when he signed that tear-off slip,

And when he send his new terms that were of no use because the contract was already made.

Criticism on Butler Machine tool v Ex-Cell-O Corporation

Lord Denning criticised this decision by saying that the courts should look at the documents passing between the parties or their conduct and then decide whether an agreement has been reached and what the terms are.

Important Point of Butler Machine tool v Ex-Cell-O Corporation

As in this case we can see the courts apply the last shot rule to see whether the contract is formed or not.

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