Battle of the Forms

Constructors plc fist communicate with Painters Ltd by requesting information on the 4th January. This is an “Invitation to treat”. This situation is similar to that in Gibson v Manchester City Council [1] where Gibson’s request for how much it’d be to buy his house, was held to be an Invitation to Treat even though both parties appeared to have agreed all terms. In the situation between Constructors plc and Painters Ltd, the request merely opens negotiations between the two parties.

The quote provided by Painter Ltd, on the 6th of January, of £7,800 constitutes the first offer in this situation. The inclusion of the terms and condition on the back of the quote means that the offer meets the standard set by Harvey v Facey [2] that in which Lord Morris states that ‘the mere statement of the lowest price at which the vendor would sell contains no implied contract to sell at that price.’ [3]

Acceptance must be communicate, unconditional and unequivocal. A contract is made of an offer, acceptance and consideration. The acceptance must match exactly what is being offer, this is known as the mirror rule, if the conditions of the offer do not match those of the offer, this will be a counter offer. In the letter on the 20th January, Constructors plc inclusion that that contract will ‘be subject to their terms and conditions’ means that when Constructors reply to Painters Ltd offer, they do not accept it but make a counter offer. The rule for counter off is established in Hyde v Wrench [4] which states that it is not seen as ‘competent for him to revive the proposal of the Defendant, by tendering an acceptance of it.’ [5] This means that the original or previous offer no longer exists. Painters Ltd offer is no longer available to Constructors Ltd unless Painter Ltd agrees to it.

No further written communication take place between Constructor plc and Painters Ltd, this means that acceptance cannot take place; Acceptance must be by conduct, silence therefore cannot constitute acceptance. This is seen in Brogden v Metropolitan Railway [6] which states that external evidence must come to lead the other party to understand that the party has an intention to enter into the contract. It is also seen in Felthouse v Bindley [7] in which the uncle told his nephew that unless he heard back from him, he’d assume that the horse was his. However there was no external evidence known by the uncle of the nephew’s intention to enter the contract, so t was held that there was no acceptance. Communication between Painter Ltd and Constructors Plc does occur over telephone, thus it would be important to know exactly what is discussed.

Another counter offer is made which both parties enter. Both parties provide consideration, Contractors plc pay £3,900, and Painters Ltd begin work. This is where the Battle of the Forms becomes an issue. The Battle of the Forms is approached in 3 ways, the first that the first set of terms and conditions are accepted, the second is that the last set put forward are accepted, (known as last shot) and finally that no contract is made at all. [8] Is Constructors plc letter of acceptance sufficient enough to recover their original terms? Butler Machine Tools Co Ltd v Ex-Cell-O Corp (England Ltd) [9] affirms the approach that huge differences in the conditions must have specific attention drawn to them. In Butler, the respondents completed the acknowledgement slip, thus accepting the counter offer, even though they sent a cover letter, this was said to be insufficient to recover their original terms. This would suggest that Constructors Plc’s letter is insufficient to recover their beginning terms.

The battle of the forms is seen in Balmoral group Ltd V Borealis Ltd [10] , Where there were dealings between the parties over many years. Balmoral would send an order making reference to its terms and conditions, Borealis would then send an invoice which contained its own terms and conditions. Balmoral would then sign there and approve them for payment. The supplier was entitle to assume that the purchaser had agreed to the contract on their terms and conditions, as they were signed with no objections made. This is an example of the last shot approach. If it is the view that the last terms presented were Constructors then according to Balmoral, it would be these that would govern the contract. This is contrasted in the case of Sterling Hydraulics Ltd v Dichtomatick Ltd [11] when the first set of terms and conditions supplied by the purchaser were held to be the ones which governed the contract. They sent an order to the supplier which referred to the terms and conditions set out on the back of the order. The supplier faxed back an acknowledgement stating that the contract would be subject to their General terms of sale which were not identified expressly in the fax, it was held that this was insufficient to indicate that this fax was a counter offer. The view could be taken that Constructors plc’s letter on the20th January didn’t not clearly identify what their terms and condition were so were insufficient to create a counter offer, this would mean that the contract was governed by Painter Ltd.

The fact that Constructors plc provide a payment of £3,900 on 5th February would suggest that this is an offer by Constructors plc to contract on Painters Ltd’s terms of 6th January, which is accepted by Painters Ltd starting work.