Battle of the Forms

When parties who are negotiating send their own terms back and forth, which terms prevail?

Battle of the Forms

It is common for the parties to negotiate the terms of the contract, which they do by going back and forth with different terms and stipulations.

How do you ascertain the terms of a contract if both parties make counter offers?

For example, Party A send his terms and conditions and then Party B emails his own terms and conditions. Part A then sends an email disagreeing with one of B's term in his latest email. What are the terms of the contract that prevail?

The ‘battle of the forms’ term arises from the fact that the parties keep changing the standard terms of the agreement. This is common in commercial agreements because the parties often have their own standard terms e.g. one may have limitation of liability, inspection by 7 days otherwise deemed no defects, risk and title.

The courts have developed several approach to dealing with this issue. The traditional approach adopted in the seminal case of Butler Machine Tool Co Ltd v Ex-Cell-O Corp Ltd laid down the "last shot" doctrine where the the "last shot" generally constitutes the terms on which the agreement is based.

Another radical approach as put forward by Lord Denning is to look at all the documents passing between the parties and their conduct to determine if they have reached agreement on all the major points of the contract (even though there may be differences between the terms and conditions printed on the back of them) which appears to be a more holistic approach.

SGCA 2001 Projection Pte Ltd v The Tai Ping Insurance Co Ltd followed Lord Denning’s alternative approach which is to look at all the documents passing between the parties, conduct of the parties and try to see whether they have reached agreement on all important points, even though differences between terms and conditions printed between them – holistic approach.

The Singapore courts in several cases have leaned towards the traditional "last shot rule" when deciding on the the terms on which the agreement is based. However, the context in which the parties have negotiated may also be relevant

The Singapore Court of Appeal in 2009 in Gay Choon Ing v Loh Sze Ti Terrence Peter seemed to endorse the traditional last shot rule.

Filed under: Contract Law
Benjamin Li Yong Le

About the Author - Benjamin Li Yong Le

Benjamin Li Yong Le (“Ben”), is an Advocate & Solicitor of the Supreme Court of Singapore. Ben is currently running his own boutique corporate and commercial law firm under the name and style of L’Avocat Law.

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