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Easat Antennas Ltd v Racal Defence Electronics Ltd [2000] All ER (D) 845

Contract law – Breach of contractual terms – Estoppel – Quantum meruit

Facts

E was a niche, specialist electronic company which worked alongside R to win a communications contract with the Ministry of Defence. On the basis that R was successful, E had negotiated an exclusive supply contract. Within the terms, E provided that this would be subject to demonstration and that the conditions of sale would be based on R’s documentation in good faith. R approached an alternative supplier to gather costings for the bid and awarded that company a sub-contract. E brought proceedings to claim damages for breaching the exclusivity terms in the agreement and for their negligence statements. They also brought an action in estoppel and claimed for remuneration on a quantum meruit basis.

Issue

The court was required to consider a number of points. The first was whether there was express or implied terms in the communication between the parties that constructed a contractual agreement. Secondly, it was for the court to decide if the defects within the agreement could be remedied by way of estoppel. This would culminate for the courts in a consideration, of whether E could access damages and if so, how much they would be owed. 

Held

The court gave judgment to E on the quantum meruit claim only. The court found that the contract was not sufficiently clear on the phrase ‘based on’ which was related to price in the agreement. On this basis, the court found the documentation between the parties could not be enforced. Estoppel could also not be used to remedy the faults within the contract. E was provided with payment for its expenses.


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