This is the third part of a recurring theme for all businesses. What happens if your business does not have a contract in writing?
Battle of the Forms – make sure you fax or e mail your terms across
It is sometimes difficult to sort out when the contract was made when different terms and conditions are in play. What do the court decisions tell us?
- A “battle of the forms” decision is Transformers & Rectifiers Limited -v- Needs Limited [2015] EWHC 269 the Technology and Construction Court found that neither party’s terms and conditions applied in circumstances where the Claimant’s terms and conditions were printed on the back of purchase orders and the Defendants’ terms and conditions were referred to in an acknowledgments of order.
- The TCC Judge Edwards Stuart decided that neither side’s terms and conditions applied because they had not been sufficiently brought to the attention of the other party.
- The Claimant had not placed its orders in the same way each time. Some were sent by post and the others by e mail. The court applied the principle that a party’s standard terms and conditions will not be incorporated into the contract unless that party has given the other party reasonable notice of those terms and conditions. In practice this means that the party relying on its own terms and conditions must fax the terms and conditions of the purchase order as a separate document where they appear on the back of purchase order, together with a fax of the purchase order. If being sent by e mail the pdf attachment must contain the face of the purchase order and the terms and conditions on the back.
- The Defendant took no steps to provide the Claimant with its terms and conditions. The court found that the party wishing to incorporate its terms and conditions by referring to them in his acknowledgement of order, thus making it a counter offer, must refer to those terms and conditions on the fact of the acknowledgment of order and make it clear that they apply to the contract. As the Defendant did not print its terms and conditions on the reverse of the acknowledgment of order and did not give the Claimant a copy of them the court decided that they did not do enough to bring them to the attention of the Claimant.
- On the facts of this case neither the Claimant or the Defendant did enough to incorporate their terms and condition so that the court decided that neither of them applied.
- No offer and acceptance
- Sometimes the old rules are the best! If there is no offer and acceptance, there is unlikely to be a contract.
- In Burgess -v- Basia Lejonvarn [2016] EWHC 40 the Technology and Construction Court decided after considering the written exchanges between the parties it was impossible to draw from the e mail exchanges any clear form of offer or acceptance to create a contract between the parties.
- Nothing was said between the parties about remuneration, duration of services, provision for their termination and “…the parties never discussed, or even mentioned, the notion that they would be entering into a contract between themselves….”
- There was no contract. A startling result, but one to alert the wary to make sure they get in writing.
- These cases show that the failure to have a signed and executed contract in place can leave businesses exposed to the risks of not being able to enforce their rights in the courts. To avoid such a calamity you should make sure your business is protected against disputes arising in the future.
