Arcadis Consulting (UK) Ltd (formerly Hyder Consulting (UK) Ltd) v AMEC (BCS) Ltd (formerly CV Buchan Ltd) [2018] EWCA Civ 2222

This case concerned whether the parties had agreed a limitation of liability clause in the formation of their contract where several versions of different terms and conditions had passed between them. AMEC engaged Arcadis to carry out design work on two large construction projects. There was correspondence in which a protocol agreement was anticipated but never formalised. On 8th November, AMEC had sent Arcadis an email containing a draft protocol agreement, terms and conditions and schedules in respect of the first project (“the November terms”). Arcadis started work shortly after its letter of response on the 13th November. On 12th December, Arcadis confirmed that work continues ‘under the instruction of your letter’. In January, new terms were introduced (“the January terms”). Arcadis carried on working, but never accepted them unequivocally. In March AMEC instructed Arcadis to carry out work in accordance with the terms and conditions ‘that we are currently under’. A second letter sent on that date contained revised terms and conditions. One of the project buildings was alleged to be defective for reasons relating to the Arcadis’ design work. Arcadis sought a declaration that its liability for defective design work had been contractually limited pursuant to the terms and conditions. The High Court held that there was a contract formed in March but that the terms and conditions, including the limitation clause, had not been agreed and no liability cap applied. The Court of Appeal allowed the appeal. The judge had placed too much emphasis on the absence of formal acceptance of the terms. Arcadis did not have to specifically mention parts of the terms in its acceptance. There was no evidence of rejection of any terms or a counter-offer. Once the judge had found that there was acceptance by conduct, it followed that the appellant unequivocally accepted all of the terms in the March letter. It was found that the November terms were incorporated into the contract. The January terms were never accepted. They would have to have been unequivocally accepted for them to be a new proposal. The reference to ‘terms and conditions’ in the March letter was a reference to the November terms.