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How To Win The Battle Of The Forms

LAST month I explained why the question of whose terms of trading apply in a contract remains one of the most
common causes of dispute between commercial contracting parties.

I discussed offer and acceptance and the need for evidence of an intent to contract. This month I discuss the battle of forms:

In the case of Tekdata Interconnections v Amphenol [2009], the buyer of goods (Tekdata) issued to the seller
(Amphenol) a purchase order stating that the purchase of goods was on Tekdata’s terms. Amphenol sent an
acknowledgement accepting Tekdata’s order but on Amphenol’s own standard terms.

No objection was raised by Tekdata at the time and Amphenol fulfilled the order. The Court of Appeal held that
the contract was on Amphenol’s terms, following a long line of cases in which courts have upheld the traditional analysis of ‘offer’ and ‘acceptance’ and the principle that an acceptance which attempts to impose new terms will not be an ‘acceptance’ but a counter-offer.

As a general rule, the party which fires the ‘last shot’ in the ‘battle of forms’, prior to the performance of the contract, is the party whose terms will be upheld as the terms of the contract.

In contract for the supply of goods, a seller, believing it is contracting on its own standard terms, can be at risk right up to the time of the delivery of goods. In the case of British Road Services v Arthur Crutchley & Co
[1968] goods were delivered to a buyer’s warehouse accompanied by delivery note containing the seller’s terms.

Instead of signing the delivery note, however, the buyer’s warehouseman stamped the note ‘received on [the buyer’s] conditions’. The buyer’s standard terms were duly held to be the governing terms of contract.

A stalemate can arise where, neither party’s terms are agreed and there is no contract at all. If, despite such a stalemate, goods are subsequently delivered then, in the absence of an agreed contract, the buyermay only be
required to pay a ‘reasonable price’.

Sometimes a party seeks to avoid getting into a battle of forms with a clause in its standard terms providing, for
example, that ‘these terms will prevail over any other terms issued’. Such a clause is unlikely to be effective if the terms of which the clause forms part have not been accepted by the other party. If you are not happy with your opposite number’s terms, respond with an acknowledgement of the order bearing your own standard terms
(see practical examples next month).

Nextmonth: Course of dealing.
Oliver Jackson is a solicitor and senior associatewithMundays LLP in Cobham. He advises on commercial disputes and is a specialist in insolvency law.
www.mundays.co.uk
T: 01932 590500

This article has been reproduced from the Contract Flooring Journal. You can find them online at www.contractflooringjournal.co.uk.