Butler Machine Tools Co. Ltd vs Ex-Cell-O Corporation (England) Ltd.

[1979] 1 WLR 401

Lawton LJ: “In my judgment, the battle [of the forms] has to be conducted in Ex-cell-O Butler
accordance with strict rules...The rules relating to a battle of this kind have been
known for the past 130 years. They were set down by Lord Langdale in Hyde v
May 23rd 1969
Judgment

Wrench.

When those rules are applied to this case, in my judgment, the answer is Butler Machine Co. send a
obvious. The sellers [Butler] started by making an offer...That offer was not price quotation to Ex-Cell-O
accepted. The buyers (Ex-Cell-O] were only prepared to have one of these Corp for a “double column
machines on their own terms...The consequence of placing the order in that plane miller”. The price quoted
way...was ʻto kill the original offerʼ [to make a counter-offer].” is 75,535, delivery in ten
months, subject to T&Cs
By signing the acknowledgment slip, Butler had accepted the counter-offer. printed overleaf, which include
a price escalation clause.
May 27th 1969 These T&Cs are to “prevail
over any T&Cs in the buyer’s
Bridge LJ: “This is a case which on its facts is plainly governed by what I may
Ask Butler to supply machine order”.
call the classical doctrine that a counter-offer amounts to a rejection of an offer
on “T&Cs as below and
and puts an end to the effect of the offer.
overleaf”. These include
Judgment

changes to delivery times,

When one turns to the buyersʼ order of May 27 1969, it is perfectly clear not
and costs, and do not
only that that order was a counter-offer, but that it did not in any way purport to
include a price escalation
be an acceptance of the terms of the sellersʼ offer dated May 23...The position
clause. They also include an
then was, when the sellersʼ received the buyersʼ offer of May 27, that was an
acknowledgment slip that
offer open to them to accept or reject...the printed tear-off slip taken from the
they ask Butler to sign. This
order itself included the perfectly clear and unambiguous sentence “we accept
slip confirms that their T&Cs
your order on the terms and conditions stated thereon”.”
are to apply.
Again, by signing the slip, Butler had accepted the counter-offer.
June 5th 1969

Say they are happy to

Denning LJ: “In many of these cases our traditional analysis of offer, counter- supply, include signed
offer, rejection acceptance and so forth is out of date...The better way is to look acknowledgment slip but
at all the documents passing between the parties - and glean from them, or from refer back to the conditions
the conduct of the parties, whether they have reached agreement on all material in their letter of the 23rd.
points - even though there may be differences between the forms and conditions
printed on the back of them. As Lord Cairns said in Brogden v. Metropolitan
Judgment

Railway Co. (1877) 2 App Cas 666, 672:

“...there may be a consensus between the parties far short of a complete mode
of expressing it, and that consensus may be discovered from letters or from other
documents of an imperfect and incomplete description...”

In the present case...I think the documents have to be considered as a whole. November 1970
And, as a matter of construction, I think the acknowledgment of June 5, 1969, is
the decisive document, It makes clear that the contract was on the buyersʼ terms Machine supplied. Butler
and not on the sellersʼ terms: and the buyersʼ terms did not include a price ask for £2,892 extra due to
variation clause.” increase in costs in the
interim. Dispute arises
 GHSP Incorporated v. AB Electronic Ltd. [2010] EWHC 1828

GHSP Inc AB Electronic Burton J: “2. ...[T]he only issue for me to decide has effectively been a Battle of
the Forms between the Claimant's Conditions and the Defendant's Conditions....

Previous negotiations clearly establish that AB 3. ...It is agreed that, if I find that neither the Claimant's nor the Defendant's
Electronic’s terms are unacceptable to GHSP (and Conditions are incorporated into the contract, then, since there was plainly a
vice versa). contract, which was indeed performed, for the manufacture and supply of the
sensors, in the absence of such express terms the contract would be governed
by, and incorporate, the implied terms of the Sale of Goods Act 1979.
Nov 2nd 2004 Nov 2nd 2004
10. There was no dispute between the parties as to the applicable authorities, to
GHSP send a purchase Acknowledged the purchase which I was helpfully referred. In a case of "Battle of the Forms", as in any other
order to AB Electronic for order as a “kick off”. Noted case of construction of contract, the test is objective, subject to the Court's
pedal sensors. This referred other issues yet to be resolved. entitlement and obligation to take into account the factual matrix; and ordinary
to GHSP’s T&Cs which principles of offer and acceptance and of certainty and sufficiency of terms apply
included unlimited liability as to when and how a contract (and what contract) is made.
for AB in the event of a
problem. 11. What was called by Longmore LJ in Tekdata Interconnections Ltd v
Amphenol Ltd [2010] 1 Lloyd's Rep 357 "the traditional offer and acceptance
analysis" would, at least in what Dyson LJ in Tekdata describes as an
uncomplicated case, be likely to lead to the last shot [last form exchanged] being
Nov 18th 2004 adopted. However, as Dyson LJ pointed out, the conduct of the parties must

Judgment
always be considered, as must the objective interpretation of the documents.
Send a new purchase order Acceptance by conduct can always be inferred.
with a new engineering
drawing (suppliers schedule 37. The reality seems to me clear. As must be the case very regularly in
followed on the 23rd of commercial discussions, both sides buttoned their lips, or fastened their
November). Again referred seatbelts, and hoped that there would never be a problem... [T]he Defendant
to their T&Cs knew that the Claimant would never accept its Conditions....Equally the Claimant
knew that every time it raised its Conditions, the Defendant said they were not
acceptable, and that a cap on liability would be needed. Hence its Conditions
were never signed, as it was provided that they should be (see paragraph 5
Dec 3rd 2004
Dec 3rd 2004 above), and indeed the Defendant declined to do so: a compromise might have
been reached, with some kind of cap on liability, but such was never discussed,
Replied with an acknowledgment
Ask AB to confirm that they or, at any rate, agreed.
of order form which included
will be supplying in
their T&Cs on the reverse. This
accordance with the 38. Against that extremely important aspect of the factual matrix, that is not a
stipulated limited liability in the
purchase order of the 18th of promising background against which the Court can seek to spell out, whether
even of a problem. The order is
November using the traditional offer and acceptance analysis, or by looking for unequivocal
subsequently completed.
acts of acceptance by conduct or "acts of alleged acceptance with the intention
(ascertained in accordance with the objective principle) of accepting the offer". I
shall below seek to reach a conclusion as to precisely when the contract was
made between the parties, but I have no doubt whatever that, as and when it
September 2006 was made, it did not incorporate either the Claimant's or the Defendant's
Conditions”
Defective batch of sensors creates problems in Ford
motor cars (to whom GHSP were supplying the parts). Consequently, Burton J held that the terms of the Sale of Goods Act 1979 should
Ford sue GHSP and GHSP sue AB Electronic. Issue apply, which, unfortunately for AB Electronic, allowed for potentially unlimited
arises as to whether AB Electronic’s liability is limited in liability.
accordance with their T&Cs