Battle of forms

An extension of the counter-offer situation arises in modern business
negotiations where both parties deal with standard form stationery. Both
have their own terms set out, often on the back of printed quotations,
invoices, delivery notes, etc. If one party’s terms differ substantially from
the other’s, on whose terms are the parties dealing? The view taken by the
courts is that the last party to send a piece of paper containing such terms,
before the actual performance takes place (often delivering goods), lays
down the terms. This has turned into the saying that ‘he who fires the last
shot wins’. This situation arose in Butler Machine Tool Co Ltd v Ex-Cell-O
Corp (England) Ltd (1979) where the buyer and seller of a piece of
machinery clearly had their own, quite different, standard terms. Lord
Denning suggested in this case that basing everything on the chance of
being the party to fire the ‘last shot’ in this way was not satisfactory, and
that the courts should look at the whole picture painted by the parties’
actions in deciding whether there is really a contract, and exactly what
terms have been agreed. His views were largely based on an approach
suggested in Gibson v Manchester City Council (1979) (see p.13 above).
However, this was not the eventual decision of the court in Gibson, and his
views are not therefore really representative of the law on this, sensible
though they may appear, and the ‘last shot’ rule still remains.

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