L E Stewart Investments Pty Ltd v Mercedes-Benz (NSW) Pty Ltd

In *L E Stewart Investments Pty Ltd v Mercedes-Benz (NSW) Pty Ltd* [1992] NSWCA 127, the New South Wales Court of Appeal considered a dispute between L E Stewart Investments Pty Ltd (the appellant) and Mercedes-Benz (NSW) Pty Ltd (the respondent). The core of the disagreement concerned the respondent's alleged breach of an agreement to supply a certain number of Mercedes-Benz vehicles to the appellant. The appellant sought damages for this alleged breach.

The Court of Appeal was required to determine whether a binding agreement for the supply of vehicles had been concluded between the parties. Specifically, the court had to assess whether the communications exchanged between the parties, particularly a letter from the respondent, constituted a legally enforceable offer and acceptance, thereby creating a contract. A further issue was whether, if a contract did exist, the respondent had breached its terms by failing to supply the agreed-upon quantity of vehicles.

The Court of Appeal found that the letter from Mercedes-Benz (NSW) Pty Ltd did not constitute a firm offer capable of acceptance. Instead, it was determined to be an invitation to treat, or an expression of willingness to enter into negotiations, rather than a concluded offer to supply the vehicles on the terms proposed. Consequently, the court held that no binding contract had been formed between the parties. The reasoning applied was that for a contract to arise, there must be a clear offer and an unequivocal acceptance of that offer. In this instance, the respondent's communication lacked the necessary certainty and commitment to be considered a binding offer.

The appeal was dismissed.