COMM 393 Chapter Notes - Chapter Case: Clean Hands, Syncrude, Purchase Order
COMM 393 Tulsa Heaters Inc. v. Syncrude Canada Ltd. Case Briefs
Tulsa Heaters Inc., Respondent (plaintiff), and
Syncrude Canada Ltd., Appellant (defendant)
[2009] A. J. No. 1368
2990 ABCA 414
86 C.L.R (3d) 245
17 Alta. L. R. (5th) 231
2009 CarswellAlta 2021
Docket: 0901-0062-AC
Alberta Court of Appeal – December 2, 2009
Facts
• Situation
o On May 15, 2001, Syncrude issued a request for quotation (RFQ) for the design and
installation of a fired heater. The provided RFQ was over 200 pages, and included a
footnote that specified that the pipes were to be made of Incoloy 825, a specialty alloy
which was suited for fluids travelling at high speed
o Syncrude specified that tubes should be seamless, and that materials should be obtained
from a list of approved pipe suppliers (AML).
o After Tulsa could not find a supplier on the list willing to provide seamless Incoloy 825
pipe of the size, Tulsa proceeded on the basis that welded pipe would be used instead
o On January 2, 2002, Tulsa ordered the materials for the heater, including the welded
pipe. On January 7, 2002, Syncrude issued a purchase order for the heater, effective
November 9, 2001. Delivery was set at September 13, 2002.
o Tulsa informed Syncrude that Incoloy pipe had been ordered from Bristol, but did not
specify the change to welded pipe
o In summer of 2002, Syncrude informed Tulsa that another company, Kaiser, might be
able to provide seamless Incoloy pipe, despite not being on the AML. On September 5,
2002, Tulsa, under direction from Syncrude, issued a purchase order to Kaiser. A formal
request for the approval of Kaiser was rejected by Syncrude because it stated that
Syncrude would pay for the additional cost of the seamless pipe, which would replace the
welded pipe in the heater.
o On December 4, 2002, Syncrude informed Tulsa that the cost of the welded pipe would
be determined at a later date. On October 3, 2003, Syncrude rejected Tulsa’s invoice for
the cost of the seamless pipe, and action was commenced in 2004.
• Initial Decision
o The trial judge found liability on a number of grounds:
▪ ambiguity in the specifications as to whether seamless pipe was a requirement
for the large diameter pipe, as opposed from a preference
▪ amendment of the contract to accept the welded pipe
▪ a second amendment to revert to seamless pipe
▪ conduct of Syncrude including promissory estoppel and waiver
▪ quantum meruit
o The appellant (Syncrude Canada Ltd) is appealing a judgment of $587,170.00 USD
awarded to the respondent (Tulsa Heaters Inc) for additional costs incurred to obtain both
welded and seamless pipe for a large vacuum heater it was building for the appellant.
Only the seamless pipe was used.
Issues
• Was the contract amended to allow the supply of welded pipe?
• Were the specifications of the contract ambiguous; did the trial judge err in admitting extrinsic
evidence relative to such alleged ambiguities?
• Was there consideration for the alleged amendments?
• Did Syncrude’s conduct amount to an acceptance of welded pipe?
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Document Summary
Alberta court of appeal december 2, 2009. Facts: situation, on may 15, 2001, syncrude issued a request for quotation (rfq) for the design and installation of a fired heater. On january 7, 2002, syncrude issued a purchase order for the heater, effective. Delivery was set at september 13, 2002: tulsa informed syncrude that incoloy pipe had been ordered from bristol, but did not specify the change to welded pipe. In summer of 2002, syncrude informed tulsa that another company, kaiser, might be able to provide seamless incoloy pipe, despite not being on the aml. 2002, tulsa, under direction from syncrude, issued a purchase order to kaiser. A formal request for the approval of kaiser was rejected by syncrude because it stated that. On october 3, 2003, syncrude rejected tulsa"s invoice for the cost of the seamless pipe, and action was commenced in 2004.
