Learning Objectives: Students will be analysing the importance of Mirror Image Rule in detecting starting point of an agreement

1. Preeti Kana Sikder
Lecturer
Department of Law & Justice
Jahangirnagar University

2. Clearing the Ground
Who decides
whether or not the
parties have
reached agreement?
How is it decided
whether or not the
parties have actually
reached agreement?

3. Who decides that an agreement
has been reached?
The Objective Test
(Subjective Approach)

4. Has an agreement been
reached?

5. Formation of a Contract
Proposal Promise Agreement

6. What is a Proposal? (Section 2
of the Contract Act)
When one person signifies to
another his willingness to do or to
abstain from doing anything, with
a view to obtaining the assent of
that other to such act or
abstinence, he is said to make a
proposal.

7. Communication of Proposal
((Section 3))
The communication of a
proposal is complete when it
comes to the knowledge of the
person to whom it is made.

8. Communication of Proposal
(Section 3)
A proposes, by letter, to sell a
house to B at a certain price.
The communication of the
proposal is complete when B
receives the letter.

9. Communication of Acceptance
(Section 4)
The communication of an acceptance is
complete,–
as against the proposer, when it is put in a
course of transmission to him, so as to be
out of the power of the acceptor;
as against the acceptor, when it comes to
the knowledge of the proposer.

10. Communication of Acceptance
B accepts A's proposal by a letter sent by post.
The communication of the acceptance is
complete,–
as against A, when the letter is posted;
as against B, when the letter is received by A.

11. What is a Promise? (Section 2)
When the person to whom the
proposal is made signifies his
assent thereto, the proposal is
said to be accepted.
A proposal, when accepted
becomes a promise:

12. The General Rule
The Court must be able to find the
documents which passed between the
parties a clear and unequivocal offer
which is matched or ‘mirrored’ by an
equally clear and unequivocal
acceptance.

13. Mirror Image Rule

14. Butler v Ex-Cell-O Corp (England)
Ltd (1979)
Butler Machine Tool Co. made and sold
machine tools.
They sent a letter to Ex-Cell-O on May 23,
1969 offering Ex-Cell-O some new
machinery for £75,535.
With it, was Butler's standard contract
terms which included a price variation
clause, so if their manufacturing costs went
up, that price rise would be passed on to
Ex-Cell-O.

15. Butler v Ex-Cell-O Corp (England)
Ltd (1979)
 Ex-Cell-O replied on May 27 and said they would
order the machinery, but on Ex-Cell-O's own
standard terms. Ex-Cell-O's standard terms did not
have a price variation clause.
 Butler replied on June 5 on the tear-off slip from
Ex-Cell-O's terms. At the bottom of this slip it read,
"We accept your order on the terms and conditions
stated therein" however Butler added a letter
reasserting that the deal was being made under
Butler's own terms, from the May 23 letter.

16. Butler v Ex-Cell-O Corp (England)
Ltd (1979)
 A while later, nothing further had been said, and
Butler delivered the machinery. They asked for
£75,535, plus £2,892 according to their price
variation clause.
 Ex-Cell-O refused to pay the extra.
 Butler sued Ex-Cell-O for £2,892 in damages.

17. What would be your decision
as a judge?

18. Butler v Ex-Cell-O Corp (England)
Ltd (1979)
 The lower court held
that the seller's price
variation clause
continued through the
whole dealing and so
the sellers were
entitled to rely upon
it.
 The Court of Appeal
held that they were
not entitled to recover
the sum claimed
because a contract
had been concluded
on the buyer’s terms
which did not include
the price variation
clause.

19. Counter Offer

20. Counter Offer
 A purported acceptance which does not
accept all the terms of the original offer is not
in fact a true acceptance at all but is a
counter offer.
 A Counter Offer kills off the original offer and
amounts to a new offer which in turn can be
accepted by the other party.

21. “Battle of Forms Case”
Popular Terminology

22. Advantages of Mirror Image Rule
This rule provides a degree of
certainty.
This rule provides a standard
which can be applied to every
type of contract

23. Criticisms of Mirror Image Rule
This rule has been criticised to be extensively rigid.
This rule encourages business people to continue to
exchange their standard terms of business in the
hope of getting the ‘last shot’ in and places the party
in receipt of the last communication in a difficult
position.

24. Lord Denning (1899-1999), Twentieth
Century’s greatest Judge
 In Butler’s case, he
held the traditional
approach to be ‘out of
date’.
 He claimed that all
contracts can not be
analysed into the form
of offer and
acceptance. Rather
better way is to look at
all the documents and
also the conduct of
parties.

25. The approach adopted by Lord Denning
seeks to construct a more flexible
framework for the law of contract which
can accommodate inconsistent terms
and an apparent lack of consensus

26. Does Mirror Image Rule prevail in
modern contract law?
Longmore LJ observed in Tekdata
Interconnections Ltd v Amphenol Ltd:
“…it will always be difficult to displace
the traditional analysis, in a battle of the
forms case, unless it can be said that
there was a clear course of dealing
between the parties.’

27. Does Mirror Image Rule prevail in
modern contract law?
 Only in very exceptional cases where the parties
have an established course of dealing and that
course of dealing is governed by certain terms, the
courts may skip applying the traditional analysis.
 The traditional rule is not always rigidly applied by
the judiciary either. Currently, a rather technical
and schematic doctrine of contract is in vogue.

28. Thank you