'Battle Of The Forms' And Jurisdiction Clauses (TRW V Panasonic)

• Published date: 01 February 2021
• Subject Matter: Corporate/Commercial Law, Litigation, Mediation & Arbitration, Contracts and Commercial Law, Trials & Appeals & Compensation
• Law Firm: Quadrant Chambers
• Author: Mr Chirag Karia

OVERVIEW

This analysis was first published on Lexis'PSL on 19 January 2021 and can be found here.

Commercial analysis: In the contractual 'battle of the forms' to determine which party's standard terms govern the contract concluded, the 'last shot' usually wins. But, in TRW v Panasonic, Mr Justice Kerr exceptionally held that the 'first shot' had won. He did so because the buyer in that case had, at the outset, agreed to the seller's standard terms which precluded any contrary terms proposed by the buyer from applying even if the seller 'had effected delivery or rendered services without reservation' against a purchase order incorporating such terms, unless the seller had agreed to such terms in writing. This is an important decision because it demonstrates that parties firing the 'last shot', and those advising them, cannot safely assume that their 'shot' will always win; and that there are ways for the party firing the 'first shot' to ensure that its terms prevail instead. Written by Chirag Karia QC, barrister at Quadrant Chambers.

TRW Ltd v Panasonic Industry Europe GmbH and another company [2021] EWHC 19 (TCC)

What are the practical implications of this case?

This is an important decision for parties doing business on standard terms and those advising them, because it demonstrates that it is possible for a party to appropriately word its standard terms so as to win the 'battle of the forms,' and thereby avoid the risk of finding themselves bound by their counterparty's standard terms instead. This case provides an example of how the counterparty's rival terms can substantially prejudice the party: in this case, the buyer was deprived of the application of English law and jurisdiction and was forced to litigate in Germany under German law instead. On the other hand, the seller, by ensuring that its standard terms were appropriately worded and the buyer's agreement to those terms was obtained at the outset, was able to require all claims to be brought in its home jurisdiction (Hamburg) under its home law (German law).

This case also vividly highlights the danger for a party (usually the purchaser or recipient of services) that assumes that its 'shot' will always win because it is the last one. All the contract terms passing between the parties must be considered, and a prior agreement to certain terms, even if it did not lead to any supply of goods or services, could ensure that subsequently exchanged standard terms fail to have the intended effect.

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