Battle of Forms

Posted on 15 December 2015

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Businessman signing document

Image by © Klaus Tiedge/Corbis

‘Battle of forms’ is a very common problem in the modern commercial practice.

So, what is ‘battle of forms’?

A buyer offers to buy goods from another, on his own template of purchase order, which contains its standard conditions of trade. While the seller accepts the buyer’s purchase order, in its confirmation note or invoices, the seller then refers to its own standard conditions of trade.

If the seller’s terms differ materially from the buyer’s, will there be a contract? If there is, whose terms prevail?

In English contract law, it remains unsettled and uncertain. Though Butler Machine Tool Co vs Ex-Cell-O Corporation (England) Ltd [1979] is the leading decision on this, but unfortunately it is indecisive.

The leading textbook on contract law, Anson’s Law of Contract, suggests that The Vienna Convention on Contracts for the International Sale of Goods 1980 (CISG), could be the solution on this.

Please note, CISG only apply to international contract of sale of goods, which the parties expressly or impliedly adopt it as the choice of law.

Art 19(2) states, if the terms have been added or modified by the offeree, but these alterations are not material alternations, the offeror has the burden to object these alternations. Otherwise, it could be deemed as acceptance.

Art 19(3) further defines what are amount to material alterations, which include price, quantity or quality of the goods, place and time of delivery, extension of one party’s liability to the other, or the settlement of disputes.

Hence, as a legal counsel, we have to practice the same standard of care – whether we are reviewing 80-pages written contract, or 1 page purchase order or invoice with the fine print.

Note: This article also published at LinkedIn.

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Posted in: Contract Law