Butler Tool Machine Co v Ex-Cell-O Corporation Ltd brief

Facts: The plaintiffs were contracted to supply the

defendants with a machine subject to a price variation
clause in their standard form which would take effect if
there was an increase in costs at the time of delivery.
The defendant responded to the offer with their own
terms and conditions, which did not include the ‘price
variation clause’ listed in the plaintiff’s terms. A price in
cost occurred and the plaintiffs sought to enforce the
price variation clause but the defendants contended
that the contract was created with their standard form
which did not contain any variation clause.

Issues: Whether the contract was formed on the

plaintiff’s standard form or the respondent’s form

Held: The contract was formulated on the defendant’s

standard form hence the price variation could not be
enforced.

Reason: The letter that the defendant responded with

acted as a counter offer which terminated the prior offer
from the plaintiff and made a new offer which was then
accepted by the plaintiff.

Principles:
1. First shot approach; The contract is made by the party
who offers to sell but the other party attempts to buy
the product at a price with a standard form that is so
different from the original offer that it would be unfair.
The exception would be if he brings it to the attention of
the offeror

2. Last shot approach: A contract is formed on the

conditions of the last person to send their standard form
unopposed or without objection from the contracting
party.

3. Two shot approach: the court can infer a contract

based on the similarities in the forms of both parties,
where the terms mutually contradictory, the conflicting
terms can be scrapped and replaced with reasonable
implications.