NEWS & EVENTS

Business in the region have been warned not to assume their terms and conditions are the ones in force in agreements, as they may be in for a surprise.

Thats the warning from city based lawyers Roythornes, commenting on a case which tackled the old chestnut known as the Battle of the forms.

Partner Paul Tate explained:

The most basic principle of law of contract is that a contract is formed when there has been an offer and acceptance for valuable consideration - usually money.

The two companies in a recent case had been doing business together for over 20 years without problems.  The buyer placed orders on terms which stated that its standard terms and conditions would apply and the sellers accepted the orders, making it clear that their standard conditions would apply. Little regard was given to the small print.

The Court of Appeal had to decide whether the fact that they had been dealing together for so long and had evolved practices overruled the usual need to assess who had fired the last shot at imposing its terms over the other party.

The decision made was that once delivery of the goods occurred after the sellers acknowledgement of order and in which the acknowledgement made it clear that the sellers terms were to apply, the sellers terms took precedence. 

Paul urged all businesses to check their terms and conditions and to make sure they were confident about which terms they were operating under in business transactions:

Given that it is always easier for a seller to fire the last shot and then deliver, it is on balance likely that buyers take the greater risk, if they are not really on the ball and up to speed with the law of contract. 

Of course, in the real world, businesses with a long and successful history of dealings would rarely expect to engage in a hard-nosed or cynical battle of the forms.  However, the case reminds us that sometimes, things do go wrong and it is better to be prepared than to be faced with unexpected and expensive surprises.