Battle of the Forms
Published on 10th May, 2016 by Benjamin Li Yong Le
When parties who are negotiating send their own terms back and forth, which terms prevail?
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 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.
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