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SCENARIO 1: AeroLogistics Ltd, a cross-border freight forwarder, emails a quote to ship machinery for Zenith Manufacturing, stating 'Subject to AeroLogistics Standard Terms'. Zenith replies with a purchase order stating 'Order placed subject to Zenith Purchasing Terms'. AeroLogistics receives the order, does not object, and ships the machinery.
Under contract law, whose terms govern the contract?
ACCA · Question 48 · Corporate and Business Law
SCENARIO 1: AeroLogistics Ltd, a cross-border freight forwarder, emails a quote to ship machinery for Zenith Manufacturing, stating 'Subject to AeroLogistics Standard Terms'. Zenith replies with a purchase order stating 'Order placed subject to Zenith Purchasing Terms'. AeroLogistics receives the order, does not object, and ships the machinery.
During transit, AeroLogistics breaches the contract, causing a 2-week delay. Zenith loses a £10,000 contract because of the delay. Zenith could have rented replacement machinery locally for £1,000 to fulfill their contract but chose not to. How much in damages is Zenith likely to recover?
SCENARIO 1: AeroLogistics Ltd, a cross-border freight forwarder, emails a quote to ship machinery for Zenith Manufacturing, stating 'Subject to AeroLogistics Standard Terms'. Zenith replies with a purchase order stating 'Order placed subject to Zenith Purchasing Terms'. AeroLogistics receives the order, does not object, and ships the machinery.
During transit, AeroLogistics breaches the contract, causing a 2-week delay. Zenith loses a £10,000 contract because of the delay. Zenith could have rented replacement machinery locally for £1,000 to fulfill their contract but chose not to. How much in damages is Zenith likely to recover?
Answer options:
£10,000, because that is the actual loss suffered.
£11,000, combining the lost contract and the potential rental cost.
£1,000, because Zenith failed to mitigate their loss.
£0, because delays are an accepted risk in shipping.
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