In dealing with battle of the forms, a traditional contract analysis should apply unless clear evidence to the contrary – Tekdata v Amphenol, Court of Appeal…

G was a long-term supplier to Rolls Royce. G bought items from B, which in turn bought components from S. The relationships had been in place for many years. Over the years, G had required B to obtain items from S to G’s specification and to a price required by G. S and G also had a long-term contract under which S agreed to supply to B at a price required by G. During the relationship, B sent purchase orders to S containing B’s standard terms and conditions, and S responded with its order acknowledgements, which in turn contained S’s standard terms and conditions. It came to be determined which terms and conditions applied. The High Court ruled that although a purchaser’s terms and conditions would normally be superseded by the supplier’s in this sort of ‘battle of the forms’ scenario, B’s terms applied here because it was never intended that S’s terms should apply and the parties had always intended for B’s terms to apply.

The Court of Appeal disagreed with the High Court’s analysis. The traditional analysis of offer and acceptance applied unless it was clear that their common intention was for some other terms to apply. The parties had opportunities to agree to a single set of terms and conditions but had never done so. It could not be inferred from the facts that the parties never intended for S’s terms and conditions to apply. Although a long-term relationship and parties’ conduct may displace traditional offer and acceptance analysis, that was not strong enough here.

Paul Gershlick, editor of www.Upload-IT.com and a Partner at Matthew Arnold & Baldwin LLP, comments: ‘This case shows the importance of having clear contracts so everyone knows the terms on which they are dealing. This is especially so if the contract goods or services are complex or worth significant sums of money as they are more likely to end up in dispute. Sometimes people refer in their quotations, order forms and order acknowledgements to their own terms and conditions applying, without ever getting to the bottom of which set of terms really do apply. The parties in this case have ended up incurring significant time and legal expense in going to court – time and money that could have been better used elsewhere. Far better if they would have had clear contracts instead.’