The Battle of the Forms Continues

Those involved in ordering goods and services or putting contracts together will know that, unless individually negotiated, it can sometimes be difficult to know whose terms are incorporated into the final contract. The circumstances giving rise to this are frequently referred to as the Battle of the Forms. The outcome can depend upon who was the last person to issue a document which referred to their terms (such as an Order, or an Order acknowledgement) before the contract was concluded. (Remember terms referred to or attached to an invoice issued post completion of an order are usually sent out too late to form part of the contract – unless there has been a previous course of dealing).

The key here is identifying the offer and the unequivocal acceptance of that offer, something which came before the Court again in July this year in the case of Gibbs V. Lakeside Developments Limited. 

The case was an appeal from the County Court and related to a settlement offer and whether the settlement had been accepted so as to result in a binding settlement agreement.

The Facts

•  There had been dispute about the forfeiture of a lease.

•  A claim had been brought which the parties tried to settle before it reached Court.

• Gibbs wrote to Lakeside Developments saying that the minimum sum she would accept was £90,000 which had to be paid by the 16^th

• Lakeside replied saying it accepted the offer and providing a Consent Order for signature (which when signed would have been a concluded contract).

• However, the Consent Order said that Lakeside would pay by the 8^th April and not 16^th

The arguments

• Gibbs said that the email from Lakeside accepted her offer – so that there was a binding settlement agreement.

• Lakeside disagreed and said their offer was in fact a counter offer, which Gibbs had not accepted – so there was no binding settlement agreement.

The Decision

The Court said that you have to clearly identify a specific offer and a definite acceptance of that offer.  In this case, the amount of money and the date by which it was to be paid were integrally linked and therefore the email of 8 March, (despite saying that it accepted Gibbs’ offer) was in fact a counter offer.  There was therefore no binding agreement because Gibbs had not accepted the counter offer. 

The Court also said that the County Court Judge should not have ignored other communications and information which indicated that Lakeside had not in fact accepted the original offer. 

Summary

Agreement between the parties on the terms of a contract (and whether a contract actually exists) are vital. So when doing business, if not individually negotiating a contract, make sure your procedures are such that you end up contracting on your chosen terms, and not those of another.

For further information or support with contracts, please feel free to contact our commercial team using the contact form at the side of the screen.