Boots the chemist vs Amdahl Ltd

Amdahl, a provider of computer equipment to Boots, were found to be in breach of contract for having refused to repurchase computer equipment which they were under obligation to do so. This was due to an offer made previously, including an exercisable option of delaying the sell-back time. Boots however, upgraded with a rival company, and Amdahl argued that their offer was not accepted and so were within their right to withdraw it. 3. In structuring my argument, I would firstly want to establish whether the letter dated 20/07/1995 constituted an agreement.

This is significant as without the original offer and acceptance a contract simply does not exist. The second issue I would want to allude to is whether the two parties objectively agreed to what they set out to achieve. If this is the case presumably both parties possessed the intention to create legal relations. Thus, giving rise to a binding contract. The final issue to address is that of consideration, i. e. was the variation of the original contract capable of benefiting both parties? If so we can ascertain that the consideration aspect was satisfied.

4. Waller LJ, in his judgement, heavily highlights the theory of market ideology. That is that where a party in the business environment reasonably assumes that they have concluded a bargain, then that assumption should be protected. Waller LJ feels this form of assumption of bargain is present due to the formalist and realist negotiations between Boots and Amdahl via the letters sent and the telephone conversations between both parties and therefore a legally binding contract should have been enforced.

Thus Waller LJ's judgement was just. It could also be stated that Waller LJ adopted a consumer welfarist approach, i. e. that the consumer, Boots, should be entitled to fairness and reasonableness in contract. This is reflected in Waller LJ's actual judgement where he seemed to imply, given his verdict, that Boots should be entitled to a fair and reasonable contract, due to prior conduct on behalf of both parties which would give rise to a legally binding contract.  

Regarding the issue of consideration, Waller LJ states clearly that in connection to the variation of the buy-back agreement, both parties had the potential to benefit, although an element of detriment was evident if Boots were to accept the benefit. The benefit to Amdahl was that they would not have to buy both processors and in addition they would have a further opportunity to allow them back in as suppliers in 1996. Boots had the benefit of being able to postpone their decision but suffered the detriment of receiving a lower price if they did so. To summarise, Waller LJ held that these facts amounted to sufficient consideration.