In today’s business world, it is extremely common that both parties to a transaction will use their own business forms. For example, the Seller issues a Sales Order to his customer, after having received a Purchase Order from the customer. Each of the forms, the Sales Order and the Purchase Order, have legal terms printed on the back of the form. These legal terms can set binding conditions that govern the transaction. For example, warranties applicable to the product or service, or how and when to provide notice to the other side in the event of a business dispute.
The forms can conflict. The Seller’s form excludes all warranties of any type, and the Buyer’s form specifically states that there are warranties that apply. What happens in the event of a conflict between the two forms?
Before the advent of the Uniform Commercial Code (“UCC”), in the event of a dispute, the rule of law was that the parties had not reached an agreement, especially if payment has not been made, or goods and services have not been exchanged. The common law reasoning was that the offer (Sales Order in our example), and acceptance (Purchase Order) had to be exact mirror images of each other. The UCC has addressed this issue in Article 2-207. However, there are still many cases in which the “battle of the forms” can seriously impact your business transactions, and cause conflict that leads to unnecessary litigation.
We are here to assist you in preparation of proper business forms, and if need be, to evaluate the forms of your business partners. Please fill out and send the contact form.