Athena Brands wins contract dispute with Superdrug Stores
Athena Brands has won a contract dispute with Superdrug Stores over the supply of various cosmetic products.
Athena claimed that it had entered into a binding agreement with Superdrug in an exchange of emails with one of its employees.
In the course of the email exchange, Athena had asked the employee to confirm that he was placing orders and committing to the specified yearly minimum quantity. He had emailed back saying ‘go ahead’.
Athena sought its losses from the shortfall in the alleged minimum quantities, calculated at just under £980,000, plus storage charges for unsold stock and interest.
Superdrug submitted that the emails did not give rise to any agreement in the terms alleged, because it was not committed to purchase any products unless and until it issued a specific purchase order.
It said there had been no intention by the parties to create legal relations, and its employee responsible for sending the emails had not had the authority to commit to any such contract.
The court found in favour of Athena. It held that the employee had been presented as a buyer authorised to negotiate terms of trade, with no relevant restriction.
There was nothing in the history of the negotiations to show that Athena or an objective observer would have understood that the buyer’s apparent agreement to a minimum quantity was not what it seemed, or that in making it he did not intend to bind Superdrug.
There was no doubt that Athena had relied on the employee’s confirmation as binding Superdrug, and nothing in the evidence could show that it had acted unreasonably in doing so.
Please contact Sarah Liddiard if you would like more information about the issues raised in this article or any aspect of contract law.