Battle of the Forms, Consideration
& Equity
Battle of the Forms
A battle of the forms arises when two parties are negotiating the terms of a contract and each party
wants to contract based on its own terms. The battle of the forms occurs when A offers to buy goods
from B on its (A's) standard terms and B purports claims to accept the offer on the basis of its own
standard terms.
Butler Machine Tools Ltd v Ex-Cell-O Ltd [1979]
Case Facts
Ex-Cell-O (defendants) wished to purchase a machine tool from Butler (claimants). Butler sent out a
quotation of £75,535 along with a copy of their standard terms of sale. The terms included a price
variation clause and a term that the seller's terms would prevail over any terms submitted by a
purchaser. The machine would be delivered in 10 months. Ex-Cell-O put in an order for the machine
tool at the stated price and sent a set of their terms which did not include the price variation clause.
The order contained an acknowledgement slip which required a signature by Butler and was to be
returned to Ex-Cell-O. Butler returned this response slip with a cover letter stating that the order
was entered into under original quotation. The machines were then delivered, and Butler sought to
enforce the price variation clause, demanding an extra £2,893. Ex-Cell-O refused to pay.
Case Decision
Court of Appeal held in favour of the defendants. The offer to sell the machine tool on the terms
provided by Butler (claimants) was destroyed by the counteroffer made by Ex-Cell-O (defendants).
Therefore, the price variation clause was not part of the contract. The contract was concluded on Ex-
Cell-O's terms since Butler signed the acknowledgement slip accepting those terms, and although
the letter which accompanied the tear-off slip referred to the quotation, it did so only for the
purposes of identifying the machine and its price - it did not revive the terms and conditions in the
quotation.
Point to Take Away
Case is an example of the last shot rule being applied. Where there is a battle of the forms whereby
each party submits their own terms the last shot rule applies whereby a contract is concluded on the
terms submitted by the party who is the last to communicate those terms before performance of
the contract commences. In this case it was decided that the claimant’s returning of the defendant’s
tear away slip was an acceptance of the defendant’s offer as well as their terms; with the letter that
accompanied the slip being merely an identification of the order. Thus, the last terms communicated
before the performance of the contract began were the defendants.
Case also shows that in certain circumstances the court won’t view what one party believes to be a
counteroffer as such, but rather just an identification of the offer.
, Tekdata Interconnections Ltd v Amphenol Ltd [2009]
Case Facts
The parties had been doing business for many years. Tekdata (claimants) issued purchase orders
which stated that the purchase was to be on Tekdata’s own terms and contained a delivery date of
26 weeks from the date of the order. Amphenol (defendants) acknowledged the orders by sending
acknowledgments to Tekdata which stated that Amphenol’s terms and conditions were to apply. The
claimants alleged / claimed that some of the connectors were delivered late and were not fit for
purpose or of merchantable / saleable (suitable for sale) quality. In their claim, the claimants relied
upon their own terms and conditions of business. The defendants, on the other hand, relied upon
their own terms and conditions for of business (contained terms which limited their liability for any
breaches of contract) for defence. It was therefore necessary for the court to decide which terms
and conditions of business governed the contract. This required the court to solve the ‘battle of the
forms.’
Case Decision
It was held that the traditional offer and acceptance analysis (the last set of terms applies) must be
adopted unless the documents passing between the parties and their conduct show that their
common intention was that some other terms were intended to prevail. The evidence here was not
sufficient to displace the standard analysis. Thus, the court sided with the defendants.
Point to Take Away
In a “Battle of the Forms” case an objective assessment of what the parties must have intended is
required – in order to assess whether there was a common intention for some other terms to
prevail. However, the courts will still apply the usual rule i.e., the last party to present its contract
terms prior to performance of the contract will win the “Battle of the Forms”.
Consideration
What is Consideration?
The law concerns itself with bargains. This means that each side must promise to give or do
something for the other. The element of exchange (i.e., give / doing one thing for something else) is
known as consideration and is an essential element of every valid simple contract.
When a party makes a promise to another where that promise places an obligation on the party but
where that party does not receive anything in return (no consideration), then the promise is said to
be gratuitous. A gratuitous promise will not be binding unless made in the form of a deed (speciality
contract).
The Types of Consideration
Consideration can take two forms:
• Executed consideration: where one party promises to do something in return for the
performance of act by another party e.g. I promise to pay you £50 if you return my lost cat.
(note: if there is a contract it would be unilateral)
• Executory consideration: where the parties exchange promises to perform acts in the future
i.e., a promise for a promise e.g. I promise to pay you £50 on Monday if you promise to sell
me your camera on Monday. (note: if there is a contract it would be bilateral)
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller nkgnd. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for £2.99. You're not tied to anything after your purchase.
