Shooting blindly in the ‘battle of the forms’

The term ‘battle of the forms’ has been coined to describe situations where parties have reached an agreement negotiated on two different sets of standard terms, and it is uncertain exactly whose terms govern the agreement. As standard terms and conditions are drafted to protect the interest of the party to whom they belong, a battle ensues between the parties for their standard terms to be the ones on which the agreement can be said to have been concluded.

Previous case law provides that the battle is often won by the last party to tender their standard terms and conditions without their terms being expressly rejected by the other party. This principle known as the ‘last shot rule’, is however not definite, and additional questions have been raised in light of the recent case of Transformers & Rectifiers Ltd v Needs Ltd where in a surprising ruling the court decided that neither of the parties’ standard terms and conditions applied. It was held that the claimant’s terms on the back of the purchase order, did not apply as the claimant had not done enough to bring them to the attention of the defendant as no reference was made to their existence on the face of the order.

In relation to the defendant’s claims, it was held that although the acknowledgement of order made reference to delivery of the goods being subject to the defendant’s terms and conditions of sale, a copy of these terms were not attached to the acknowledgement. Failure to send these terms and conditions meant that the claimant could not accept them, and as a result, they did not govern the contract either

A general rule which applies to all ‘battle of the forms’ scenarios is yet to be established, but an element of shooting blindly continues to occur when parties negotiate on documents which reference their own terms and conditions. When contracting it is important to

• ensure that the other party is provided with a clear unmistakable copy of your terms and conditions. Try as much as you reasonably can to bring these terms and conditions to their attention. If your terms and conditions are provided at the back of a document, be sure to clearly draw attention to them on the face of it
• clearly state that your terms are the only terms you are willing to do business on, and where possible get the other party to acknowledge this in writing
• where documents are sent electronically, ensure that documents are sent in their entirety to avoid something as essential as the terms and conditions being omitted
• regardless of the existence of a long standing relationship, ensure that your terms and conditions are provided to and acknowledged by the party with every transaction
• finally, always take the last shot!