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How do the courts deal with the battle of forms, where parties to an intended contract exchange forms containing mutually inconsistent terms - Essay Example

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In the contemporary business climate, the basic legal doctrine of offer and acceptance is not always sufficient to determine the terms upon which the parties have contracted. For example, contract formation in construction contracts often involves lots of pre-contractual…
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How do the courts deal with the battle of forms, where parties to an intended contract exchange forms containing mutually inconsistent terms
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Download file to see previous pages ten negotiate through exchanging correspondence, with a series of counter offers as to price and the contract terms; this has been referred to as the “Battle of the Forms” (Beale, 2007). In considering this Beale in Chitty on Contracts underlines this problem and concludes:
“Thus it is possible by careful draftsmanship to avoid losing the battle of the forms, but not…….. to win it. The most that the draftsman can be certain of achieving is the stalemate situation where there is no contract at all” (Beale, 2007).
In order to address this legally, the courts have adopted the “last shot principle”, which was established in the case of Butler Machine Tool Co –v- Ex Cell-O-Corp ((1981) 24 BLR 94). According to this principle, the presumption is that the last offer which has been accepted without qualification will be determined as covering the conditions of the contract.
This was confirmed in the recent case of Tekdata Communications Ltd v Amphenol Ltd ([2009] EWCA CIV 1209), which confirmed that there the general principle of the “last shot” wins was applicable unless there was unequivocal evidence of contrary intention. For example, in the Tekdata case itself the parties were in a production chain involving four companies producing aircraft components and at first instance, the trial judge departed from the last shot doctrine on the basis that the parties were part of a complex supply chain where prices were non-negotiable and the defendant did not suggest that its own terms and conditions were incorporated into the contract.
However, the Court of Appeal rejected this rationale and held that “the context of a long term relationship and the conduct of the parties” may in certain circumstances be sufficiently strong to displace the usual “last shot wins” rule. Therefore, whilst the general principle is that the last shot wins, the course of dealing between parties may sometimes negate this and result in the terms and conditions ...Download file to see next pagesRead More
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