GHSP INC v AB ELECTRONIC LTD (2010) : Formation of contract


Claimant designed and manufactured a number of electrical systems to go into cars. The Defendant supplied pedal sensors to be incorporated within the claimant’s systems.

A number of sensors where supplied which were later found to be defective. The loss sustained was said to be substantial in relation to inspection and replacement of those parts.


Simply put, whose terms formed the contract?


The claimant submitted that its purchase orders formed the contract as a result of the Defendant’s conduct. The Defendant disagreed stating that the purchase order was accepted but with the defendant’s terms attached and that the Claimant had accepted this counteroffer.


Defendant was found to have not accepted the claimant’s terms. However at the same time there was no negotiation or correspondence as to the content of the Defendant’s counteroffer. The court went to find that both parties’ terms did not form the contract and that accordingly those terms implied by the Sale of Goods Act 1979 where implied.

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