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October 26, 2011

The "Battle of the forms

Comparative approach of different laws shows that there are different approaches to resolve a conflict between general conditions of sale and general conditions of supply. One of this approach, chosen by English law, is the « Last shot rule ».

In Butler, Lord Denning wrote (1): nki0091l.jpg

where there is a battle of the forms, there is a contract as soon as the last of the forms is sent and received without taking objection to it. In some cases, the battle is won by the person who fires the last shot. He is the person who puts forward the latest term and conditions; and, if they are not objected to by the other party, he may be taken to have agreed with them.

The reference to combat terms, like « Battle », « Last shot » shows the importance of freedom of contract and of taking care about clauses contained in the agreements and terms and conditions send by the other party.

In France and Germany prevails an other rule : the Knockout Rule or the Restgültigkeitstheorie, which considers that terms and conditions of both parties are neutralized when they enter into conflict. They are considered as non-invokable and the general rules of law applied (2). This rule seems to be more objective and protect more the inattentive party. However, French administration and law which is not so strict fixed and organised as the german one sometimes differs from this rule, by trying to to impose general conditions of sales as the most important contractual document and asking judges to let it prevail - which can in my opinion appear quite injust for the buyer (3), or letting prevail the conditions which are the most visible (4).

This can be inimaginable and quite difficult to understand for english lawyers, which are strictly opposed to the idea to let the judges add terms into the contract or interpret it.

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NB : This knock-out rule was adopted UNIDROIT PICC (5) and by the American Uniform Commercial Code (6). There is a third approach followed by the Dutch civil code, the « first blow » rule, in which prevail the terms and conditions of the offeror, unless they are expressly rejected by the acceptor.

(1) Butler Machine Tool Co v Ex-cell-o-Corp [1979] 1 W.L.R. 401.

(2) For exemple, Ccass mars 1995, (pourvoi n°83-15936) in France and BGH, 20 mars 1985 (NJW 1985, 1838) in Germany, cited in Cases, Materials and Text on Contract Law, Ius Commune Casebooks for the Common Law of Europe, Second Edition, p 309 and p312 note (7).

(3) circulaire Dutreil du 16 mai 2003, Avis de la commission d'examen des pratiques commerciales n°04-04, 7 juil. 2004.

(4) Com. 20 oct. 1964, Bull civ. III, n°458

(5) article 2.1.22

(6) §2-207(3)


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