Since 1977 lawyers have talked about the importance in contract formation of the ‘battle of the forms’. What is this and how does it affect you if you are in business?
What is ‘the battle of the forms’?
The battle of the forms refers to a situation in which two companies, A and B, are negotiating the terms and conditions (T&C) for a task or project.
It may go something like this:
A offers to buy goods and/or services from B on A’s conditions
B accepts A’s offer, and agrees to supply goods and/or services but only on B’s own conditions
A acknowledges B’s acceptance on A’s conditions
This is the ‘battle’ and it continues for as long as A and B send each other orders, estimates, acknowledgements and other forms, each with A’s or B’s T&C. Neither A or B ever agree to the other side’s terms and rarely stop to consider whose terms are the most appropriate for the goods and/or services being provided.
Is it a contract?
The traditional legal method of analysing what contract has been made as a result of the ‘battles of the forms’ concentrates on viewing each document as either an offer or counter-offer or acceptance. But as Lord Denning stated:
“In many of these cases our traditional analysis of offer, counter-offer, rejection, acceptance and so forth is out of date. The better way is to look at all the documents passing between the parties — and glean from them, or from the conduct of the parties, whether they have reached agreement on all material points — even though there may be differences between the forms and conditions printed on the back of them.”
What are the possible outcomes?
A battle of the forms can result in:
- a contract on A’s conditions (‘the battle is won by the person who gets the blow in first’);
- a contract on B’s conditions (‘the battle is won by the person who fires the last shot’);
- no contract because key terms were never agreed or a contract on some blend of terms (‘the battle depends on shots fired on both sides’).
What should you do?
Make sure your terms are those that become part of your contracts.