RTS Flexible systems ltd v Molkerei, Facts, Important points

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

Facts of RTS Flexible systems ltd v Molkerei

The claimant used to make automated machines and agreed with the defendant to build an automated machine for his factory. The parties had a letter of intent along with a long form contract.

As the letter of intent expired while the negotiations continued on the long form contract. The Dispute between the defendant and the claimant arose which said that whether the machine delivered by the claimant good enough to work for defendant?

Issue:

The first issue was that after the letter of intent expired the formation of the new contract was automatically formed or not?

 As the High court on this issue said that there was a contract but as the case was appealed to Court of Appeal (COA) they said that there was no contract, The defendant than appealed to the House of Lords. (HOL)

Decision:

The HOL said that there was a contract between the parties as Lord Clarke said

“It Depends not upon the subjective state of mind , But upon the consideration of what was communicated Between them by words or conduct”

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