Contract Law: The battle of the Reforms - Coursework Example

?The Battle of the Form grade 28th January Introduction The battle of the reforms means a legal scenario which is under contract law1. The contract law requires the parties involved to have good contract agreement terms. With no clear intentions of entering into a contract under the same terms for the parties involved, a contract might be found not to exist at all. There must be certainty in the terms of the contract so that the contract can be considered sufficiently precise. Most of the businesses use forms that have special terms and standard legal language on backs or bottom of the documents governing sales and purchases. This is more so to the business men who focuses more on the commercial transactions than legal doctrine. When the recent judicial decisions are used, the court uses the first and last short approaches in determining the effectiveness of the contract. In practice The boilerplate language is classically in small print, covering business contingencies which arise rarely2. Through the application of the recent judicial decisions, some major disparities are identified in the legal doctrine resulted from discrepancies in some conditions that accompany replies and offers3. This case is similar to the case between Mr. Jones, company by the name of CMP and Ricoh [Ricoh UK Limited v Jones (2010) EWHC 1743 (Ch). According to the agreement, no one was supposed to have any contact with any client except through Ricoh. Mr. Jones had no reciprocal obligation to deal with the clients without Ricoh. Later there arose a dispute over tenders to supply MFDs outside the country for a company which had been a regular customer for CMP.4 The court dismissed this on the basis that, the parties were operating on the same levels of distribution chain. The Uniform Commercial Code has much consideration on the offers accepted when the sellers sends written confirmations of acceptance to the buyer5. Another similar cases involved Manchester CC v Gibson [1979] 1 WLR 294. Gibson was an occupier and tenant of a council house and he wished to purchase the house under the “right to buy scheme”. He received a letter from the council informing him of the willingness of the council to sell the house. Later, the political control of the council changed resulting to revoke of the policy of the right to buy. It was held by the House of Lords that the council never made the offer to sell and, therefore, there could be no valid acceptance. 6 The above scenario can also be related to a case of Manchester CC v Storer 3 All ER 824. In the case, the council had sent an application to purchase a house which was about to be completed. When he completed the form as the instructions required, the council refused to sign and to return the application as they had agreed. When the case was taken to the court, the judge held that, the contract was formed.7 The judicially and the international legal community have tried to find satisfactory ways of deciding the terms of controlling an agreement.8 Another similar case involved Ex- Cell- O corporation (England) Ltd v Butler machine Tool Co. Ltd [1979] 1 WLR 401. Later, a dispute occurred when each company used separate standard form. One company used a form with a price variation which had a clause while the other company used a contract form without a price variation clause. In the case, the House of Lords held that, the contract was based on Ex- Cell- O corporation’s terms because it had included an acknowledgement strip which was signed by both parties.9 According to Section 2(207) of The Uniform Commercial Code10, it is assumed that the merchants do not read or understand the terms which are contained on the exchanged forms between the parties involved. This section of contract Law is similar to Article 19 of CISG which emphasizes on the irresponsibility of the merchants for getting clear information of the contract agreement11. In 1975, the United States Court resolved a case between Manning Fabrics Inc. 441 F. Supp., and Lea Tai Textile Co. Ltd. 1404 [S.D.N.Y. 1975]. According to Manning Fabrics Company’s form, the settlement of the dispute was supposed to be held in New York in the American Arbitration Association or by Textile Industry arbitrator. The Lea Tai Company’s form indicated that, the arbitration was supposed to be conducted following the Civil Code of Hong Kong which requires each party to choose an arbitrator. When the case was forwarded to the court, the judges applied Section 2- 207 of the Uniform Commercial Code which resulted to invalidation of the clauses. The parties were required to resolve their conflicts before the case was subjected to the domestic court12. Restrictive application of the terms and conditions listed in Article 19 (3) of CISG13 would have resulted to good and understandable settlement of the disputes. Another similar scenario involves a case of AB Electronic Ltd v GHSP Inc [2010] EWHC 1828 (Com.).14 The pedal sensor was to be incorporated into an electronic stifle pedal for use in Ford motor vehicle. When they were used in vehicles, they led to uncontrolled reduced acceleration and stumbling of engines. This led to significant losses, but, before determination of the issues of quantum and liability, a preliminary issue was ordered in order to determine the terms and conditions of the parties involved. The GHSP forms indicated that, the purchase order was accepted on 3rd December of year 2004 by AB Electronic Ltd, but, the other party’s forms claimed to receive the PO on 18th December of 2004. During the ruling of the case, Judge Burton identified the main issues as the condition and terms of Purchase Order. To conclude, Mr. Burton referred to a lot of factual witness evidences which were provided by the parties’ correspondence and representatives. The judge was not charged with determining the terms and conditions implied in the case because the parties had agreed that, the terms implied would only apply if both of their terms were applicable. Another good example is a case of Cleveland Bridge and Engineering Co. v British Steel Corporation [1984] 1 ALL ER 504 where some major terms were never agreed although the work was completed. According to the ruling of the court, the items in question were paid for but there was no contract made15. This is not a satisfactory decision because the terms and condition of the contract must be constructed together16. Conclusion According to judicial decisions, the buyer is required to send the form to the seller as an offer to buy. Afterwards the seller replies with a form containing the materials modifications as a counter offer. Lastly, the seller is supposed to dispatch the goods which are to be received and accepted by the buyer. This process of receiving the goods from the seller by the buyer is considered as the acceptance of the terms in seller’s form and it fully satisfies the business man. However, both Section 2- 207 of The Uniform Commercial Code and Article 2.22 of the UNIDROIT principle tries to find a solution to the conflicts between the clauses. The provision tries to overcome the inconveniences and the rigidity of the last shot doctrine as well as the mirror Image rule. This is very effective to business men as it ensures transparency in commercial transactions better than in legal doctrine. References Books Brown, C., Restoring peace in the battle of the reforms: A framework for making U.C.C section 2- 207 works, 69 L. Rev. 893, 1991, pp. 902. Cheeseman, R. , Goldman, T., The Paralegal Professional, Pearson Prentice Hall, Boston, 2007, pp. 50-59. Larry, A. D., International sales law: a critical analysis of CISG jurisprudence, Cambridge University Press Publisher, 2005, pp. 303. Richey, L.R., Sales of goods; Battle of the forms under UCC and CISG, A practical perspective, Pennsylvania, 2010, pp. 13-19. Richards, P., Law of contract, Foundation studies in law series, Longman Publisher, 2002, pp. 99-106. Articles Carl, K., The U.N Convention on contract for international sale of goods, Contract Formation & Battle of the forms, 21 Column. J. Trans-National L. 529, 1983, pp. 555. Murray, J., The chaos of the ‘Battle of the forms’ solutions, 39 V. L. Rev. 1307, 1986, pp. 20. Northwestern, journal of international law & business, Vol. 24, California, 2003, pp. 120-140. Cases Donnely, M., Manning Fabrics Inc. 441 F.Supp., v Lea Tai Textile Co. Ltd. 1404 [S.D.N.Y. 1975], Commercial Law. L. Rev., 1979, pp. 257. Ben, E., Battle of the Forms, Cleveland Bridge and Engineering Co. v British Steel Corporation [1984] 1 ALL ER 504, 14 August 2008. Russell, C., Battle of the forms, Ricoh [Ricoh UK Limited v Jones (2010) EWHC 1743 (Ch), Commercial Law, L. Rev., 1979, pp. 2. Websites Woods, I., Battle of the forms. AB Electronic Ltd v GHSP [2010] EWHC 1828 (COMM.), retrieved 28 January 2012, < http://www.mondaq.com/x/131830/Insurance/Battle+Of+Th e+Forms+GHSP+Inc+v+AB+Electronic+Ltd+2010+EW> Contract I, Essential features of a contract, retrieved 6th February 2012, < http://www.oup.com/uk/orc/bin/9780199579464/marson_ch02.pdf> Read More