l ega l
THE
BATTLE
OF THE FORMS
Battle of the forms refers to the not uncommon situation in which one business firm makes an
offer in the form of a pre-printed form contract and the offeree responds with its own form
contract. At common law, any discrepancy between the forms would prevent the offeree’s
response from operating as an acceptance. There would be no contract in such a case.
BRYAN PICKARD
Greenhalgh Pickard
Solicitors and Accountants
M
embers who have attended my
presentations on contracts in AWA
training may recall discussions
about the ‘battle of the forms’. At common
law, the formation of an enforceable contract
requires agreement. Agreement occurs
when there is unequivocal acceptance of
an offer. Where the acceptance amends or
adds to the terms of the offer it constitutes a
counter offer.
The ‘battle of the forms’ occurs when
one party makes an offer that contains its
standard terms and the other responds with
its own set of terms. Often it takes the form
of a quote, from the supplier, and a response,
in the form of a purchase order, from the
buyer. If the supplier starts to supply the
goods or do the work, it can be implied that
they accepted the buyer’s counter offer. If
there is no actual or implied acceptance
then there will be no enforceable contract.
This was succinctly characterised by Lord
Denning, a famous English judge, who said
that in some cases the battle is won by the
person who ‘fires the last shot’.
In the United States, there are various
federal and state commercial codes that
regulate contracts. The Uniform Commercial
Code introduced what is called the ‘knock
out-rule’. This rule is applied by courts
in resolving a battle of the forms where
parties’ forms contain conflicting terms. In
this situation, a contract is still formed but
the knock out rule operates to reject both
parties’ terms if there is a disagreement
between the forms exchanged. The
inconsistent terms are knocked out of
the contract and replaced by standard
provisions set out in the Code.
This is not the situation in Australia. In
reading an article about knocking out the
‘knockout rule’, I was reminded of some
advice I have given in my training sessions
to overcome the problems caused by the
‘battle of the forms’.
If, as a supplier, your objective is to have the
terms of your contract prevail, you should
include a term in your quote that states
that there is no agreement until you have
received a signed copy of terms of supply
signed by the buyer. The terms of supply
can be printed with your quote and have a
place for the purchaser to sign with words
indicating acceptance, for example, ‘by
signing below, you accept our offer as set out
in this quotation’.
It is useful to include a whole of contract
clause in your terms of quote that states
that apart from terms implied by law that
cannot be excluded, the terms in the supply
agreement are the entire agreement and any
other express or implied terms are excluded.
If you do sales through e-commerce, there
should be a statement posted on your
website where sales information is located
stating that a sale is dependent on the seller
receiving a sales confirmation. It could be a
‘click through’ acceptance of a form on the
website or an ‘I agree to terms’ tick box (with
a link to the terms). Alternatively, the receipt
of a digital copy of the terms signed by the
buyer can be required.
Having put the above into your forms,
the next step is to ensure that you have
the signed terms before you perform the
contract. This is where you need a sign in big
bold letters:
NO SIGNED CONTRACT - NO SUPPLY.
For more information, contact Greenhalgh Pickard Soliciters and Accountants on 07 5444 1022 or visit www.greenhalghpickard.com.au
12 Australian Window Association