Much English contract law dates from bygone days, writes Sue Lindsey. As a result, the student of contract learns a lot about goods being put on display, conditions that appear on the back of tickets, and that an offer is accepted by post when the letter of acceptance is posted. Now that we order things online and they arrive by way of courier, the relevant considerations can be a bit different. Occasionally new judgments that tackle these issues emerge, one recent case being Computer 2000 Distribution and others v ICM Computer Solutions (November 2004).
The Court of Appeal had to deal with three related decisions, all claims brought against the defendant, ICM. ICM had, as middleman, ordered computers from the three claimants on the instructions of a third party, Mr Cole. The claimants each duly delivered the goods, by courier, to Cole, who turned out to be a fraudster. Unsurprisingly, Cole did not pay ICM, and disappeared with the computers. The claimants were pursuing their money from ICM, who defended the claims on the basis that the goods had not been delivered in accordance with its instructions.
Neither the claimants nor the defendant, nor the security guard who took delivery of the computers, were at fault, but the loss had to fall somewhere. To understand how the court reached its decision that ICM had to pay, some details of the fraud need to be explained. They reveal a frighteningly familiar scenario of packages being delivered and signed for that, certainly in this case, meant that the purchaser had to pay.
Cole rented a room in serviced office accommodation for two months in a building near the Albert Embankment in London. The agreement was to let the room to Amec; not, the Court of Appeal hastened to add, Amec plc, which has no connection with the building.
It then appears that Cole started ordering computers, several of them, from ICM. ICM issued purchase orders to the claimants for the computers, saying that they were to be delivered to Amec plc, at the Albert Embankment address, for the attention of Richard Cole. It was those purchase orders that were the basis of the contract in each of the three cases.
The claimants' courier duly pitched up at the address ICM had given them. No names of any tenants appeared on the door. They handed the computers over to the security guard, Elijah Bee.
As part of his job, he signed the couriers' slips to say he had received the goods. He passed the goods on to a man who signed the appropriate record form 'R Cole'. The only unusual aspect of the deliveries that Bee recalled was that the boxes were collected by Cole within minutes of their arrival.
ICM's case was that its purchase orders required delivery to Amec plc, or its authorised agent. In other words, not Amec. But the Court of Appeal said that the correct question was not whether anyone with authority from Amec plc received the goods - they plainly did not.
The correct question was whether the courier delivered the computers to the person held out by ICM as authorised to receive goods dispatched to Amec plc at that address. That was Richard Cole, as stated on the purchase order, and he seems to have received the computers. So the goods had been delivered in accordance with ICM's instructions, and it had to pay up.
Lord Justice Chadwick went on to consider, although on the facts he did not need to do so, whether, if the computers had been delivered to Bee but not collected from him, that would be enough for the claimants to say they had complied with the terms of ICM's order?
The answer would usually be yes. A deliverer of goods discharges his obligation if he or she delivers them to a person with apparent authority to receive them. A courier cannot know what authority the actual recipient has; he or she just has to deliver the goods, while taking proper care to make sure that no unauthorised person receives them. So, if some apparently respectable person obtains access to a purchaser's premises and signs for goods and takes them, the loss falls on the purchaser.
Buyers should, therefore, beware and make sure they know, and stipulate, to whom things are to be delivered.
Sue Lindsey is a barrister at Crown Office Chambers. Visit www. crownofficechambers. com