Brogden v Metropolitan Railway (1877) 2 App Cas 666

Facts

The complainants, Brogden, were suppliers of coal to the defendant, Metropolitan Railway. They completed business dealings regarding the coal frequently for a number of years, on an informal basis. There was no written contract between the complainant and the defendant. However, the parties decided that it would be best for a formal contract to be written for their future business dealings. The Metropolitan Railway made a draft contract and sent this to Brogden to review. The complainant made some minor amendments to this draft and filled in some blanks that were left. He sent this amended document back to the defendant. Metropolitan Railway filed this document, but they never communicated their acceptance of this amended contract to the complainants. During this time, business deals continued and Brogden continued to supply coal to the Metropolitan Railway.

Issues

When a dispute arose, the issue in this case was whether there was a contract between Brogden and the Metropolitan Railway and if the written agreement they had was valid.

Decision/Outcome

The House of Lords held that there was a valid contract between suppliers, Brogden and the Metropolitan Railway. The draft contract that was amended constituted a counter offer, which was accepted by the conduct of the parties. The prices agreed in the draft contract were paid and coal was delivered. Although there had been no communication of acceptance, performing the contract without any objections was enough.

The case of Brogden v Metropolitan Railway Co. is significant in contract law because it established the principle that parties’ conduct and the factual circumstances surrounding their interactions can lead to the implication of contract terms, even if a formal written contract is not fully executed. This principle is important in situations where parties act as if there is a contract in place, and it highlights the importance of looking at the parties’ behavior and intentions when determining the existence and terms of a contract.