The “Battle of Forms”

The ‘Battle of Forms’ occurs when there is an exchange of numerous documents between two parties, leading to a legally binding agreement with terms that contradict one another.

The occurrence of the ‘Battle of Forms’ was best illustrated and explained in the landmark English case of Butler Machine Tool Co. Ltd v Ex-Cell-O Corporation (England) Ltd [1979] 1 WLR 401.

In Butler Machine Tool Co. Ltd, the Plaintiff who is also the seller, on 23.05.1969 offered to deliver a machine tool where the delivery was to be made in 10 months-time. The offer was also subjected to a condition that it was only to be accepted on the terms set out in the quotation which would prevail over any other terms in the buyer’s order.

One of the seller’s terms of the offer was that the machine would be charged at prices ruling at the date of the delivery. The buyer then replied on 27.05.1969, placing an order with terms and conditions different from those of the seller’s offer. One of the major differences was the absence of the price variation clause in the buyer’s reply.

The buyer’s reply however, had a ‘tear-off’ acknowledgment and was to be returned as an acceptance of the buyer’s order with the phrase “on the terms and conditions thereon” stipulated on it. The seller then proceeded to return the acknowledgement on 05.06.1969 with a cover letter which stated that the delivery was to be:

“in accordance with our revised quotation of May 23 for delivery in … March/April 1970.”

The machine tool was ready to be delivered around September 1970 but at that material time, the buyer had no capacity to receive the machine. The machine was subsequently only delivered in November 1970. The seller then invoked the price variation clause and claimed for an increased payment from the buyer due to the rise in cost between 27.05.1969 and 01.04.1970, when the machine was due to be delivered.

The trial Judge, Thesiger J. gave judgments in favour of the seller and the buyer appealed. 

In the Court of Appeal, Lord Denning M.R. described the case as a ‘Battle of Forms’. Lord Denning held that as soon as the seller returned the acknowledgement attached to the order, a contract had without a doubt been concluded. The pertinent question was, on whose terms was the contract concluded?

Lord Denning analysed the documents involved and found the following:

i. In a traditional way of analysis, the quotation issued on 23.05.1969 by the seller constituted an offer to the buyer.

ii. The order dated 27.05.1969 from the buyer to the seller which contained materially different terms and conditions, was in law a rejection of the original offer from the seller and constituted a counter-offer.

iii. Reference was made to the landmark case of Hyde v Wrench (1840) 3 Beav. 334.

iv. The return of the acknowledgement dated 05.06.1969 constituted an acceptance by the seller to the buyer’s offer.

v. However, Lord Denning stated that a better solution to a “battle of forms” would be to look at all the documents exchanged between the parties or the conduct of the parties to determine if they had reach an agreement on all the material terms.

vi. Lord Denning had also cited the case of Brogden v Metropolitan Railway Co. (1877) 2 App. Cas. 666 where Lord Cairns said the following:

“… there may be a consensus between the parties far short of a complete mode of expressing it, and that consensus may be discovered from letters or from other documents of an imperfect and incomplete descriptions…”

vii. In some cases, the ‘battle’ is won by the man who fires the last shot i.e. the man who puts forward the latest terms and conditions, and when not objected to, may be taken as being agreed upon. 

viii. There are also cases where the ‘battle’ is won by the one who gets the first blow i.e. when there are material differences in the terms and conditions that it would affect the price, the buyer ought not to be allowed to take advantage of it unless he specifically draws it to the attention of the seller.

ix. Taking all the documents involved in this case as a whole, Lord Denning allowed the buyer’s appeal. 

x. Lawton L.J. and Bridge L.J also echoed in agreement. 

The Kuala Lumpur High Court in a very recent case of Dan-Bunkering (Singapore) Pte Ltd v The Owner of the ship or vessel “PDZ Mewah” & Anor [2020] 1 LNS 1966 applied a similar principle of law. 

The Court applied the ‘last shot rule’ in determining that the Confirmation Order which was the last document exchanged before parties proceeded to transact the supply of the bunker prevails over the previous documents exchanged. 

The Court had also cited the case of Mahabuilders Berhad v Hotel Rasa Sayang Sdn Bhd [2014] 3 CJ 661 where the court, in this case, mentioned that only when there is a rejection of the final counter offers or document transacted that the relationship between the parties end. 

Lord Denning’s approach in taking all documents as a whole in the ‘Battle of Forms’ case was also adopted by Zainun Ali FCJ in his judgment, albeit a dissenting one, in the Federal Court case of Affin Bank Bhd v Mohd Kassim Ibrahim [2013] 1 CLJ 465 when dealing with the construction of documents exchanged between parties.

As such, it can be seen that the principle in a case of the ‘Battle of Forms’ is very similar to that of a classic principle of rejection of an offer with a counter-offer. In most cases, the terms and conditions contained in the last undisputed or unrejected document will be deemed to be accepted and agreed upon by both parties of the agreement, except, as explained by Lord Denning has explained in Butler Machine Tool Co. Ltd, in the instance where one is the ‘party who gets the first blow’, wins.