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Case 7 - Biscuit

Published online by Cambridge University Press:  11 February 2021

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Summary

‘Hartley Ceramics’ is a company which makes ceramics. ‘Arkwright Homecare’ is a retailer. Both are small companies, formed relatively recently. In December 2011, the managing director of Hartley Ceramics, Ian, entered into a contract with the then managing director of Arkwright Homecare, John, agreeing that Hartley Ceramics would supply Arkwright Homecare with 500 pieces of specialist ceramics. Clause 1 of the contract describes the pieces to be delivered as ‘biscuit‘. After the commencement of the contract, Ian was replaced by Barton, who is now the manager at Hartley. In early 2012, Hartley delivers the first consignment of pieces of ceramics at Arkwright Homecar’s offices. However, John is surprised when he discovers that the pieces that Hartley delivered are fired but not glazed. He presents background material at the formation of the agreement, which shows that both he and Ian understood ‘biscuit’ to mean fired and glazed. John refuses to take delivery of the ceramic pieces but is nonetheless set on having the contract performed as he interprets it. Barton refutes John’s claim. He argues that ‘biscui’ is a well-known and established term in the ceramics industry, used to indicate that the pieces are fired but not glazed. Apparently, Barton continues, John and Ian both attributed the same but unconventional meaning to the term ‘biscuit’. Therefore, Barton concludes, Hartley performed the contract properly and Arkwright should accept the delivery.

Assume that the term ‘biscuit’ does indeed normally mean fired but not glazed, and that Hartley Ceramics can provide sufficient evidence to prove that both Ian and John were negotiating on a shared but unusual understanding that ‘biscuit’ meant both fired and glazed. If the background material satisfies the requirements for it to be accepted by a court as evidence in your jurisdiction, what weight can be given to the fact that Ian and John were negotiating on a common but incorrect understanding of ‘biscuit’ in interpreting Clause 1 of the contract?

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Publisher: Intersentia
Print publication year: 2020

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