Battle Of The Forms Flashcards
Battle of the Forms
A “battle of the forms” may occur when parties use standardized forms to make offers and acceptances. Such forms contain fixed contractual language (boilerplate) which often conflicts with the terms included in the other party’s forms. Thus, although a contract may be formed through the exchange of such forms, the parties may disagree as to which terms govern the contract.
UCC Additional or Different Terms in Acceptance or Confirmation by Non-Merchants
Under the UCC, if additional or different terms are included in an acceptance for a contract between non-merchants, these terms are merely a proposal unless acceptance is expressly conditional on assent to the additional or different terms.
UCC Additional Terms in Acceptance or Confirmation by Merchants
Under the UCC, additional terms in an acceptance for a contract between merchants become part of the contract unless the offer expressly limits acceptance to the terms of the offer, the additional terms constitute a material alteration, or notification of objection to the additional terms has already been given or is given within a reasonable time after notice of them is received.
UCC Different Terms in Acceptance or Confirmation by Merchants
Under the UCC, different terms in an acceptance for a contract between merchants do not generally become part of the contract even if they do not constitute a material alteration. There are different interpretations of the UCC and how such different terms are handled. The commonly applied rules are the Knockout Rule, the First Shot Rule, and the Last Shot Rule. Additionally, a proposed new rule is the Best Shot Rule; however, this rule has not yet been adopted by any jurisdiction.
Knockout Rule
Under the Knockout Rule, different terms in an offer and acceptance are “knocked out” of the contract, and the contract consists of those terms upon which the parties agree, with UCC gapfillers used to supply missing terms. Proponents of this rule favor it because they view the UCC gapfillers as more “fair” where terms are different. Opponents of this rule argue that it encourages parties to include one-sided language in their contracts because the worst that will happen is that the one-sided terms could be knocked out and replaced with UCC gapfillers.
First Shot Rule
Under the First Shot Rule, terms in an acceptance which are different from those in an offer are out, meaning that the contract consists of the terms of the offer. Proponents of this rule favor it because it supports the doctrine that the “offeror is master of his offer.” Opponents argue that this rule does nothing to discourage inclusion of one-sided terms in boilerplate contract language.
Last Shot Rule
Under the Last Shot Rule, different terms are treated the same as additional terms. That is, different terms are treated as a proposal (i.e., counteroffer) and are deemed accepted and therefore binding, if followed by performance. Proponents of this rule favor it because it provides a simple rule for interpretation that, rather than favoring one party’s form over the others, aims toward finding a contract that consists of the terms upon which the parties appear to agree, allowing for both express terms and conduct to govern the agreement. Opponents argue that this rule favors whoever sends the last writing, because that party’s different terms will be included unless the recipient is careful to make a clear and timely objection.
Best Shot Rule
Although not adopted by any jurisdiction, the proposed Best Shot Rule would determine which party’s forms include standard terms which are the most fair overall, and adopts those terms entirely. Proponents of this rule favor it because they believe it will encourage drafters of contracts to use terms that are more fair to all parties, rather than adopting one-sided boilerplate language. Opponents argue that an offeror should be free to propose a contract which appeals to him.
