It has been a long held principle that the battle of the forms is usually determined by the “last shot”: that a contract is formed on the basis of the last set of T&Cs put forward by one party of the other. However, the recent case of TRW Ltd v Panasonic Industry Europe GmbH & another [2021] EWHC 19 (TCC) is a timely reminder that parties should not assume the application of a general rule in these cases.
Has the court’s decision in TRW increased uncertainty in the battle of the forms? In essence, TRW were bound by a broad agreement entered into many years earlier, and despite putting forward their own T&Cs in relation to a number of specific transactions, the court held TRW to its earlier (general) bargain. However, without the very specific working of Panasonic’s T&Cs which expressly caught this novel situation, it is suggested that TRW’s T&Cs would have almost certainly prevailed.
The court’s decision should have the effect of focussing commercial parties’ minds on the contractual terms to which they are signing up. It should not be assumed that the last shot will win and, by this decision, the court appears to have emphasised the importance of parties’ freedom to contract on whatever bases they wish. We may now see clauses which expressly exclude future T&Cs from taking precedence in a battle of the forms commonplace. However, as Kerr J highlighted in his judgment, in cases where both parties are overly-alive to the issue there is a substantial risk that no contract will be formed at all.