Ferrum Metal Exports Pty Ltd v Lang

Ferrum Metal Exports Pty Ltd (the applicant) sought to recover from Lang (the respondent) the sum of £1,000,000, which it alleged was due under a contract for the sale of goods. The applicant claimed that the respondent had breached the contract by failing to pay for goods delivered. The respondent denied the existence of a binding contract and, in the alternative, alleged that the applicant had failed to deliver goods in accordance with the contract. The matter came before the High Court of Australia.

The High Court was required to determine whether a binding contract for the sale of goods had been formed between the parties. In particular, the court had to consider whether the correspondence exchanged between the parties constituted a sufficient offer and acceptance to create legally binding obligations, and whether the terms of any such agreement were sufficiently certain to be enforceable.

The court found that the correspondence did not establish a concluded agreement. It held that the respondent's communications did not amount to an unqualified acceptance of the applicant's offer, but rather constituted a counter-offer. As there was no acceptance of this counter-offer, no binding contract came into existence. The legal principle applied was that a contract is formed when there is a clear offer and an unqualified acceptance of that offer, with sufficiently certain terms.

The High Court therefore held that the applicant had failed to establish the existence of a contract and dismissed the applicant's claim.