The battle of the forms contract conditions who will win

Time and time again we have come across businesses with no standards terms and conditions.  Sometimes they have them but they appear only on the back of invoices.

This is OK when nothing goes wrong.  However, when a supplier tries to charge you before delivery or a customer refuses to pay when you expect or other issues arise they matter.

In English law there is a very simple rule for Business to Business transactions.  A contract is made when there is an offer and an unconditional acceptance of that offer.  So if you ask for a quote for something and someone replies referring to their standard terms and you say yes you have accepted their terms.  In business you do not have to have seen the terms. They could be published on their website – the link to heir terms may not work either.

If the terms are on the back of a piece of paper and are not referred to on the front in general they will not count.

Often there is a request for a quote, a supplier offers, you order and they acknowledge and then deliver.  In this case it is the last set of terms that were stated before delivery that will normally apply.  Having different terms on a delivery note, or an invoice will normally have no effect.  The contract is made when delivery commences i.e. the goods start to arrive or you turn up to deliver the service.  This process of forms going backwards and forwards is called “the battle of the forms”.

There is an exception where the parties have been trading for some time and the terms of trading are clear.  In that case they will continue even if on the odd occasion they are not stated.

The lesson is clear:

  • Set up some clear terms of sale and clear terms of purchase for your business.
  • Make sure they do not contain unfair terms.
  • State clearly in all communications that these are the terms for the transaction.
  • Maybe publish these on your website so you can just refer to the page.

Finally we are not offering legal advice, you need a solicitor for that, just some general education.