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Business contracts - let’s not do battle! Part One


Many businesses seek to trade on standard terms and conditions to avoid negotiating bespoke contracts every time they buy or sell goods or services to another business*, but these can get misused and the so-called Battle of the Forms can arise.  In the first of 2 articles, Justine Lowe from SME Solicitors explains how the situation might develop.

 

What is known in the legal trade as ‘the Battle of the Forms’ can arise and specifically applies when businesses attempt to forge a contract on their own standard terms and conditions. Each party will attempt to make sure that their own terms (drafted more favourably to them) will be the overriding contract terms. The classic battle is when one party makes an offer to sell or buy using their terms and the other party seeks to accept the offer with a document that uses its own conflicting terms. Often the latest terms exchanged will win but the question can still arise as to whose terms actually govern the contract. Is there actually a contract at all? In the haste of getting the deal done the small print is often overlooked and the battle lines are drawn.

 

A contract is made when an offer is made by one party which is unequivocally accepted by the other either by words or conduct. The Courts will try to find a contract if the parties are doing business together and they will look at the party’s behaviour and exchange of communications to find what terms apply if it is not certain.

 

These battles usually only arise when there is a problem under the contract. Before the problem can be resolved, the parties can become embroiled in lengthy and expensive discussions as to what are the actual terms of the contract before thought can be given to resolve the dispute.

Part Two will look at ways to avoid the battle including steps to ensure that your terms take priority.

 

*Please note there are different considerations if you use standard terms to sell goods or services to consumers.

 

For advice on all aspects of business contracts, please contact Justine Lowe at SME Solicitors on 01905 723561 or email Justine.lowe@smesolicitors.co.uk

Added: 19 Aug 2021 14:18


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