Battle Of The Forms (Video)

Farmers often have terms dictated to them by suppliers and buyers. Sometimes there is scope to negotiate contract terms, sometimes not. However what contractual parties cannot do is unilaterally change terms after the contract has been entered into.

Just recently we have started to see the first Brexit related contractual clauses which seek to pass the cost of Brexit (new tariffs, charges, customs issues, cost increases, delays) onto the buyer. This is particularly the case with animal feed.

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Standard terms of sale are regularly used by suppliers and purchasers. Sometimes supplier and purchaser present each other with their own standard terms resulting in two conflicting documents jockeying for precedence; the so-called "battle of the forms".

Businesses using standard terms or buying products on standard terms need to take all reasonable steps to bring the conditions to the other side's attention. The best way is to point out the conditions expressly in pre-contract correspondence. However this gesture almost invites the other side to negotiate the terms - which is precisely what standard terms are designed to avoid.

The difficulty is in determining whose terms prevail. If each side seeks to impose its own terms, there is no acceptance at all. In practice, this means that the last set of terms, dispatched prior to acceptance or performance (the last shot fired in the battle of the forms), will prevail.

Solutions

Practically, a seller has (only) two alternative courses of action: one is less commercially attractive but more likely to result in legal certainty; the other is usually more attractive from a commercial standpoint, less so legally.

Negotiate

The first option is to negotiate the terms with the buyer. If the seller's conditions are expressly agreed as governing the contract then specific, agreed variations can be set out in a side letter. The advantage is that, once agreement is reached, the parties know exactly where they stand legally. The disadvantage is that negotiating the contractual terms may be costly and time consuming.

Fire the last shot!

Alternatively, ensure that the conditions at least appear in pre-contract and contract documentation. This might include product brochures and catalogues, tender/proposal forms, acknowledgement of orders, delivery notes and invoices too. However, this tactic can fail as in the case of British Road Services Limited v Arthur Crutchley & Co Limited ([1968] 1 All ER 811). The dispute...