A dispute about the extent of liability for a fire at a popcorn factory was largely to do with the terms of the contract - just like Fifty Shades of Grey
Fifty Shades of Grey by EL James, have you read it? I have, just. It has set the book world on fire. It’s all about getting into contract. About all those rules of offer and acceptance; all about the battle of the forms; stuff for grown-ups too.
Popcorn in Pontefract is all about another kind of fire. When Cadbury makes popcorn, it sets light to corn. It pops. Some of it pops onto the factory floor. Then the blokes stamp it out. They did this time, and the popcorn popped a fraction too much. Hey-ho, the whole factory burnt down. The claim against the fire protection company is £110m.
That story is also about getting into contract, the rules for offer and acceptance, and the battle of the forms. The fire protection firm said its terms applied and limited liability to £14,000. No, no, said the popcorn firm, our terms applied, so pay £110m. Now then, shall I tell you about Fifty Shades of Grey or about popcorn?
Christian Grey is a multi-millionaire: single, young, good-looking, private jet, the boat and the apartments. Enough cash to build a new popcorn factory, but popcorn is not his game. He just invests. Student Anastasia Steele turns up one day to interview him for her university magazine. She is nervous, a tad star struck, new to men. Can you see what’s coming? Her piece for the magazine requires a photo shoot. They have to meet again. He makes her knees tremble. Coffee leads to dinner, dinner leads to more knee trembling. Oh it’s all very arm’s length. Can you now see what’s coming?
Now I admit, I don’t usually read this stuff. Actually, I bought it for Mrs Bingham. One of her girlfriends said it was a good read. In any case, Anastasia has a battered Volkswagen Beetle, so does Mrs Bingham. Mr Grey took the Beetle away for a brand new Audi. Blow me! Mrs Bingham has a new Audi coming next week. Do you see why I bought the book?
When I dipped into fifty shades I immediately got excited - as any lawyer would - by the negotiations that go on when Mr Grey proffers a standard contract to the very pretty Anastasia
When I dipped into Fifty Shades, I immediately got excited - as any lawyer would - by the negotiations that go on when Mr Grey proffers a standard form contract to the very pretty Anastasia. Honest, it really is my style of contract document. It has tick boxes. All that Mr Grey and Anastasia have to do via offer and acceptance, via gentle arm wrestling, via the odd bit of soft soap, is to decide which boxes to tick. And by now in the toing and froing Anastasia has moved into a swanky flat, courtesy of Mr Grey, has a wardrobe of haute couture, has tasted the Bollinger and the caviar. It’s not quite at arm’s length any more, but they are edging their way towards getting into contract. Some of the tick boxes are stumbling blocks. Does any of this remind you of the fumbling around you do with a JCT Standard Form?
As to the popcorn, well now, ADT Fire & Security negotiated to provide the fire protection contraption at the Cadbury production lines. The installation cost was only £9,000. One evening, Alan Hardcastle was filling the plastic popcorn barrels when the plastic began to melt. It took only a few moments to squirt the fire hose and douse the fire. But some of the burning popcorn spilt onto the factory floor. Stamping was not enough. The entire factory was burnt to a cinder. Cadbury turned to ADT with the bill.
All that Mr Grey and Anastasia have to do via offer and acceptance, via gentle arm wrestling, is to decide which boxes to tick
The trial in the Technology and Construction Court was, in the main, about the terms of the contract. ADT had designed and installed the fire system. Like Mr Grey and Anastasia, there was an offer, and more offers, and a deal said to be done. I like the story in the judgment (Trebor Bassett & Cadbury vs ADT Fire & Security Plc, 22 July 2010, and the Court of Appeal, 23 August 2012) because the “Getting into Contract” section rehearses all the rules. And you can see that if ADT’s bid is the contract, it limits its liability to £14,000 whereas if Cadbury’s order applies, ADT is in for the £110m. The story covers “Battle of the Forms”, “Principles of Contract Formation”, “Interpretation of the Contract”, “Offer and Acceptance”, “Last Shot”. Cadbury’s terms were found to apply.
Anastasia calls Christian Grey, Mr Grey. The two are forming a contract. The boxes are gradually being ticked. Her knees are still trembling. As to what each ticked box provides is slightly beyond my pay scale.
Tony Bingham is a barrister and arbitrator at 3 Paper Buildings, Temple