Problem: I had an issue with a supplier over terms and conditions, and although this issue is now kind of sorted, I want to outline the issue in order that we do not make the same mistake again.
We are a contractor specialising in heating and ventilation, and the job we have an issue with is to do with a specialist supply.
About 12 months ago, we were invited to submit a price on a project in London. The project involved converting an old warehouse into apartments and part of our package involved in manufacturing heat recovery units.
These heat recovery units are bespoke, and in our tender documents the client had identified the manufacturer, and we obtained a price from them which was included in our overall tender to the employer. After the contract was awarded to us, we sent a purchase order to the manufacturer of the units. Our purchase orders include our standard terms and conditions. The manufacturer subsequently came back, thanked us for the order and attached their own terms and conditions. I then wrote back to the manufacturer and said that we would not accept their terms and conditions, and that our terms and conditions would apply; I then heard nothing back from the manufacturer until they were about to deliver the first batch of the units, sending an invoice that applied for an amount, saying that until payment was forthcoming, the units would not be delivered.
I refused making payment pre-delivery, pointing out that out T&C’s were 30 days payment post the approved invoice. However, the manufacturer said that it was their T&C’s that prevailed, and would not budge. The units are now all delivered, but we had no choice but to make payment prior to delivery. Can you tell me who’s T&C’s prevail and what I should do next time?
Response: in legal circles, the situation you find yourself in is referred to as the ‘battle of the forms’ and is not unusual. This is where Party A will give an order to Party B, and the order will have Party’s A’s terms and conditions. Party B will then decide that it does not like Party A’s T&C’s and will then go back to Party A attaching its own T&C’s.
This scenario would then continue, and the problem will be deciding which of the parties T&C’s prevail. In such circumstances, it will be the party’s T&C’s that was issued at the time of performance.
For example, if a painter issues his T&C’s (along with his price), and states that he will start work on 1 March, and the employer then ‘accepts’ the price, but with the order issues its own T&C’s, if the painter starts on site on 1 March but then on 3 March writes back to the employer saying that it is his T&C’s that prevail, it will be too late for the painter – by the painter’s conduct on 1 March, performance of the work commenced.
Getting back to your situation, it would have been your T&C’s that prevail over the manufacturer’s T&C’s.
© Michael Gerard 2022
The advice provided is intended to be of a general guide only and should not be viewed as providing a definitive legal analysis.
Author background
Michael is a Solicitor, Chartered Builder & Registered Construction Adjudicator, and is a director at Michael Gerard Law Limited, a solicitors practice regulated by the SRA.