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Incorporating your terms and conditions

“The Battle of the Forms”

Introduction

You may be aware that I advocate putting in place clear terms and conditions (T&Cs) for all but the most simple of commercial transactions. However, some businesses go to the trouble and expense of having T&Cs drafted but then do not pay sufficient attention to ensuring that they are incorporated into each transaction. A typical scenario is where a supplier issues a quote/price to a potential customer upon which it states that its standard T&Cs apply. The customer then issues a purchase order to the supplier upon which it states that the customer’s purchase T&Cs apply. This is commonly known as the “Battle of the Forms”.

Whose T&CS Apply?

In these situations, we have a purchaser and a supplier, both with standard T&CS and both trying to incorporate them into the transaction. What happens when there is a dispute as to which set T&Cs should prevail?

The answer to this question can get very complicated and there has been recent case law where even judges cannot agree. However, as a general rule the party which introduces its T&Cs last, prior to the transaction being embarked upon (assuming that there are no objections from the other party) will normally be the ones that apply.

Taking the example above, you, as the supplier, may find that you are contracting upon the purchaser’s T&Cs, even though you have introduced your own, simply because you continued in silence with the transaction after receipt of the purchase order.

What to do?

There are some things that you can do to safeguard against the above scenario:

  1. The simplest way to avoid confusion is to put your T&Cs into a formal agreement and ensure both you and the other party sign the document prior to embarking on the transaction;

  2. Unfortunately, 1 may be impractical for all but the largest of contracts so, prior to commencement of the contract:

  3. ensure that your T&Cs are clearly brought to the attention of the other party and easily accessible. Ideally, they should be referred to on any document you submit to the other party and a copy should be sent therewith. It is also advisable to state on such document(s) that further copies are available on, for example, the website, from head office, by writing to the following email or as the case may be;

  4. read any document submitted to you by the other party in detail and review any T&Cs attempted to be incorporated by the other party. If the other party’s T&Cs are objectionable raise the issues with them. This is likely to involve a period of negotiation and there may be a need for compromise but it is better than putting the business at risk.

This should not be relied upon for legal advice. If you would like any further information or advice please email richard@clariclegal.co.uk.

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