In the event of a contractual dispute, one of the key considerations is the terms and conditions which were originally agreed between the parties. Whilst this may seem obvious it is not always as straightforward as it may appear, particularly in so-called “battle of the forms” cases. Stuart Evans and Liane Bylett examine the implications for businesses of the decision in Tekdata Communications Ltd v Amphenol Ltd [2010].
This is the usual type of situation when this arises: the purchaser sends a purchase order to the seller referring to the purchaser’s own standard terms and conditions. Sometimes this is preceded by quotations from sellers that refer to their terms and conditions. The seller sends documentation to the purchaser which acknowledges the order and accepts the offer, but refers to its own standard terms and conditions. The terms of the contract are never mentioned again and the goods are delivered. So whose terms and conditions apply? The usual rule in “battle of the forms” cases has been long since established in the “last shot” doctrine. According to the “last shot” doctrine, each conflicting communication is a counter-offer and the last counter-offer is accepted by conduct when the goods are delivered and accepted by the purchaser. Therefore, in this example, the seller’s terms and conditions prevail.
An interesting Court of Appeal decision in Tekdata Communications Ltd v Amphenol Ltd [2010] recently confirmed that the general rule is still that “last shot wins”, unless there is clear evidence of contrary intention.
In Tekdata the parties were part of a production chain involving four companies in the production of various aircraft components. At first instance the trial judge deviated from the “last shot” doctrine on the basis that (a) the parties were locked into a supply chain at prices and specifications which were non-negotiable; (b) the Defendant did not suggest prior to proceedings that its own terms and conditions were incorporated into the contract; and (c) the Defendant had previously contracted with another company on terms which were very similar to the Claimant’s terms and conditions. Whilst the decision was overturned by the Court of Appeal and the reasoning largely discredited, the Court of Appeal held that “the context of a long term relationship and the conduct of the parties” may in some circumstances be sufficiently strong to displace the usual “last shot wins” rule.
Therefore in future, whilst the “last shot” doctrine will apply in most cases, it will be open to parties to argue that the course of dealing between the parties is persuasive evidence of contrary intention to incorporate terms and conditions different to those referred to in the final (usually conclusive) counter-offer. Of course, this does not deal with the enforceability of particular terms contained within a party’s standard terms of business, but that is another article in itself!
For more information on commercial agents and when an agent ceases to be an agent, see our recent article on the Commercial Agents Regulations.
For further information on this or any other contractual issue, please contact Stuart Evans by emailing Stuart or by calling him on 08450 990045, or speak to your usual contact in the Commercial Disputes Team.
This document is provided for information purposes only and does not constitute legal advice. Professional legal advice should be obtained before taking or refraining from taking any action as a result of the contents of this document.