The ‘battle of the forms’ is a phrase which is used to describe the common scenario in which contracting parties compete to ensure their standard terms and conditions apply.

In the second of our six-part blog series about commercial contracts we look at the practical ways businesses can ensure their terms and conditions are incorporated into their business dealings, and who is likely to come up trumps in the battle of the forms.

The traditional approach

In the first blog in this series we considered what it takes to form a legally binding contract and examined what is meant by an offer and an acceptance (Commercial contracts: a practical guide for businesses – Pannone Corporate). When considering which contract terms apply, these principles again become important as the court will examine whether there has been an offer to contract on specific terms which has been unequivocally accepted.

This traditional approach can give rise to two contrasting examples:

• where a supplier sends its standard terms of business and those terms are accepted by the customer, either expressly or by conduct in continuing to deal with the supplier on those terms, the supplier’s terms will govern the contract.
• where a supplier sends its standard terms of business and a customer responds with its own standard terms of business, the customer has in that case rejected the supplier’s terms and introduced a counter-offer to contract on its terms. The court will then be looking to see whether the supplier accepts the customer’s terms whether expressly or by its conduct.

Where competing terms of business are at play, the court will be looking at the chronology of when offers were sent and the behaviour of the parties in determining the point at which a set of terms has been accepted.

Last shot fired

More often than not, the last set of contractual terms presented without any objections being raised will be deemed as accepted. This is often referred to as the “last shot”.

For example, where a customer places an order on the basis of its standard terms and the supplier responds with its own standard terms, if the customer then proceeds to place the order and accept delivery then the last contractual terms fired will be deemed to govern the relationship (in this case the supplier’s terms).

A misfired shot

A risk for parties is failing to adequately bring terms to another party’s attention.

Standard terms and conditions must be readily available to the other party if they are to be capable of being accepted. If a document is sent by email with terms and conditions on the reverse, those terms must also be emailed if they are to be relied on.

Similarly, if documents are sent with a link to website terms and conditions, the link should be a live link through which the contractual terms can be accessed.

The court will look at all the facts of a case to determine whether or not terms and conditions have sufficiently been brought to another’s attention.

Course of dealing

The last shot fired doctrine can be displaced where the correspondence between the parties or their conduct shows that they intended to contract on some other terms. The court will examine all the evidence in the case to determine the prevailing terms.

For example, where there has been a framework agreement entered into in relation to the terms governing future supplies then a last shot fired may not succeed in overriding that framework. Similarly, where there has been a course of dealing between parties pursuant to one party’s terms then it may be difficult to displace that by shooting across competing terms, without something more.

The wording of a party’s terms may also help to guard against the last shot fired principle. In the case of TRW Ltd v Panasonic Industry Europe Gmbh (2022), the last shot doctrine was not accepted. Instead, the judge concluded that the first set of terms sent (being the seller, Panasonic) applied. Panasonic’s general conditions protected it from falling victim to the “last shot” doctrine, as it disapplied any conditions of TRW that diverged from its own terms, and the parties continued to deal with one another on that basis.

Practical Implications

Losing out in the battle of the forms can have commercially catastrophic consequences for contracting parties. It is therefore important that businesses consider their systems and processes when entering into new contracts to ensure they are legally and commercially protected through the governing terms. In practical terms, businesses should consider:

• including reference to standard terms and conditions on all pre-contract documents, to try to ensure they fire the last shot.
• negotiating and agreeing the contractual terms which will govern relations. This avoids any ambiguity as to whose terms apply.
• requiring parties to sign contractual terms so that it is clear that terms have been accepted.
• whether there has been an earlier framework agreement or a course of dealing which may be regarded as taking priority.
• training staff on the risks that contractual terms presented could be found to be incorporated by conduct. Failure to review and understand these terms could mean that a business could find itself bound by another’s standard terms.
• ensuring its terms and conditions are well drafted in order to provide protection against the last shot, as in the Panasonic example.
• making sure that terms are sufficiently brought to another’s attention. If terms are printed on the reverse of documents being sent electronically, make sure the terms are also sent. If being sent via a website link, make sure this directs to a live copy of the terms and conditions.

Finally, if parties do not in fact intend to be bound by contractual terms until a formal document is signed, or further terms are agreed, they should mark all negotiations, correspondence and draft agreements as being ‘subject to contract’ to avoid inadvertently being bound to draft terms.

If you would like to discuss this blog, please contact Sarah Bazaraa on 07920 237599 or by email to sarah.bazaraa@pannonecorporate.com

In the first of a six-part blog series from Pannone’s dispute resolution team, we take a closer look at commercial contracts, focusing at those elements which give rise to the risk of disputes, and how best to navigate those challenges.

Parties may believe that they are embroiled in a contract dispute, but the first question for the court will be “is there a legally binding contract in the first place?” In this blog, we examine the requirements for the formation of a legally binding and enforceable contract.

The five requirements for a legally binding contract

A contract gives rise to legally enforceable rights, obligations and remedies. It’s therefore important to consider whether or not a legally binding contract has been formed.

It’s not necessary for a contract to be documented in order to be legally binding. A contract can be formed whether made in writing or verbally.

However, there are five key requirements which must be present to form a legally binding agreement. These are:

1. an offer
2. acceptance
3. consideration
4. a mutual intention to create legal relations
5. certainty of terms.

Let’s take a closer look at each of these.

1          Offer

What is an offer?

An offer is defined as “an expression of willingness to contract, made with the intention that it shall become binding upon the person making it, as soon as it is accepted by the person whom it is addressed”. In other words, an offer is a promise made to enter into a contract.

When is an offer not an offer?

It’s important to distinguish between an offer to contract from what is commonly known as an ‘invitation to treat’. Parties need to consider whether the proposal which is made is intended to give rise to a legally binding contract (an offer), or whether it’s made with the intention of entering into negotiations (an invitation to treat). An example commonly given for an invitation to treat are goods displayed in a shop window. An invitation to treat will not amount to an offer to contract.

Can an offer be withdrawn?

An offer can be withdrawn before acceptance has taken place. This can happen in a number of ways. For example, an offer may give a deadline for acceptance. If the offer expires, the offer may not be capable of acceptance. If there’s no specific deadline for acceptance, the courts deem the offer to remain open for a reasonable amount of time. A ‘reasonable amount of time’ will depend on the particular circumstances of the case.

2          Acceptance

When is a contract formed?

A contract is typically formed, and therefore becomes legally binding, at the point of acceptance. Acceptance is the final confirmation that the terms of an offer are agreed. Acknowledging receipt of an offer will not constitute an acceptance. Instead, acceptance should clearly signal an intention to be bound by the terms of the offer. When assessing this, the court will apply the reasonable person test, i.e. would a reasonable person standing in the shoes of the person making an offer find that there is a clear intention to accept the terms of the offer and subsequently form the contract.

Acceptance of an offer can also be demonstrated by way of conduct which evidences an intention to accept the offer.

Is it an acceptance or is it a counteroffer?

In order for an acceptance to give rise to a binding contract, it’s important that the specific terms of the offer have been accepted. If alternative terms are proposed, this will not amount to an acceptance of the offer, but will instead amount to a counteroffer. A counteroffer amounts to a rejection of the original offer so that no contract exists. Querying something, or seeking clarification about the terms of the offer, will not, however, amount to a counteroffer.

3          Consideration

What is consideration?

The requirement for consideration is in essence the principle that you cannot get something for nothing. It’s centres on the idea that a party cannot enforce a promise unless it has given or promised something in exchange for it. The law does not interfere with the bargain struck between two parties and so will not test whether consideration is adequate, so long that the consideration has a value, even if that is a pound.

Who must the consideration move between?

Consideration must move from the party who seeks to enforce a promise, as this is in line with the doctrine of privity to a contract, i.e. only those privy to the contract can enforce the rights under the contract. However, the consideration does not necessarily have to move to the person who makes the promise.

Does past consideration count?

Consideration which is given at some time in the past is not a valid form of consideration, this being an act which has come before the promise was made and therefore not something of value.

4          Intention to create legal relations

Why is this important?

If the courts determine an agreement was reached without a mutual intention to create legal relations, that agreement will not be legally binding.

What is required?

When considering whether the parties had the necessary intention to create legal relations, the courts will consider the conduct of the parties and all the relevant circumstances. If an intention is disputed, the onus is on the party who claims there was no intention to prove this allegation. In order to avoid any ambiguity, it’s beneficial for parties to clearly identify their intentions from the outset.

The business presumption

Businesses should be aware that there is a presumption that there is an intention to create legal relations in commercial circumstances. In the event a party objects to there being a presumed intention, the onus is on that party to prove otherwise.

5          Certainty of terms

Are the terms clear?

For there to be a legally binding contract, there must also be certainty of terms. This requires all the essential terms that form the contract to be complete and free from ambiguity. If an agreement omits a material term or is uncertain, this may lead to the agreement not being capable of being enforced.

The court’s approach

In assessing whether essential terms have been agreed, the court will assess whether an honest and reasonable businessperson would have concluded from the parties’ communications and conduct that they had agreed all the terms they considered to be a precondition to creating legal relations.

Generally speaking, the court will not wish to interfere with agreements reached between two commercial parties. However, in certain circumstances, the court does have the ability to fill in gaps in a contract to give effect to the parties’ intentions. This will depend on all the circumstances of the case.

What’s next…

Our next blog post in this series will examine the ‘battle of the forms’ and how to ensure that your contract terms govern your business relations.

If you would like to discuss this blog, please contact Paul Jonson on 07737571147 or by email to paul.jonson@pannonecorporate.com

For our first profile of 2023, we meet Rebecca Mason, PA in the Litigation and Disputes Resolution team.

Hear all about how 23-year-old Rebecca from Worsley came to work in law, her involvement in the firm’s wider community groups and her athletic talents.

When did you join Pannone Corporate?

I joined Pannone as a PA back in July 2022 and, prior to this, I worked in the financial services industry within the SIPP department for investment platform, AJ Bell.

Why did you join Pannone?

The legal sector has always interested me and, as a recent graduate still somewhat figuring out my career path, I believed that working as a PA offered a brilliant opportunity to gain some on-the-ground insight into the industry. 

The chance to work in the role at one of the North West’s leading law firms has been invaluable for my career development. On a daily basis, I’m able to work alongside a vast number of inspirational people, ranging from junior to senior level.

What route did you go down, in terms of training and qualifications?

I studied history, psychology and English language and literature at A Level and then went on to study history at the University of Sheffield, where I specialised in the history of the British Empire and humanitarianism throughout the course of the twentieth century.

Why did you take this route?

History has always been a subject close to my heart and I was allured by the prospect of covering untouched, or in some circumstances, neglected areas of history. 

What is the most satisfying aspect of your job?

Leaving the office knowing that I’ve made someone else’s day that bit easier!

What does a typical day look like?

The best thing about being a PA is that no two days are the same. I work alongside a range of team members with different specialist areas, meaning that my work can be very varied. Predominantly, this involves conducting research, pulling evidence together through bundles, diary management and overseeing administrative duties.

What are your career ambitions?

I want to continue developing my skillset as a PA, whilst deepening my knowledge of the legal sector. There is a plethora of progression opportunities within the legal industry which are not exclusively for those with solicitor qualifications, so I’m hoping to explore these options further in the future.

If you were managing partner for the day, what’s the first thing you would do? 

I’d encourage my colleagues to get involved in both the charity and environmental groups within our firm to increase the positive influence that we have in both the local and wider community.

What would you be doing if you didn’t have a career in law? 

I love participating in and watching sport, so perhaps a role in sports journalism.

Do you have any particular skills/talents that your work colleagues may not know about?

I previously competed at national level in both athletics and cross country, with my proudest achievements including a bronze team medal in the Northern cross-country championships, as well as holding an unbeaten age-group record at San Francisco parkrun! 

Although I’m no longer a competitive athlete, I am still very much involved in my local athletics club, Salford Harriers, and I am the senior women’s team manager.

In the latest in our series, My Life in Law, we speak to Associate Partner, Jonny Scholes, who has been with the firm since its inception on Valentine’s Day 2014, having worked at the previous incarnation of Pannone, joining as a paralegal in 2005. Having risen through the ranks to become a key member of the dispute resolution team, Jonny talks about his love affair with Pannone Corporate, the ‘speed date’ with partners which made him realise the firm was the one, his long-held ambition to be a professional rugby player, and his side-line in writing children’s picture books!

Tell us a little bit about when you joined Pannone Corporate?

I moved across as part of the management buy-out of the old Pannone LLP (with the remaining team joining Slater & Gordon). I started at the old Pannone as a paralegal for eight months or so in 2005. I’d been offered a training contract and arranged to do some work whilst I was waiting for it to begin. I started life in the travel team in personal injury, dealing with bulk claims involving sickness bugs abroad! I then had a few months off when I travelled across the West and East coasts of America with my brother, before starting my training contract in September 2006.

What did you do before joining?

My only other jobs before working at Pannone were working in my local pub – The Crown in Heaton Mersey – and working as a theatre porter at the Alexander Hospital in Cheadle. I enjoyed both jobs and they gave me some useful transferable skills, particularly in dealing with people, including some who could be a little nervous or wary and others who were a little more difficult! I also did a vacation scheme placement at the old Pannone too.

What’s your role at Pannone?

I’m currently an Associate Partner, having worked my way up through the ranks from my trainee days. I’m in the dispute resolution team and deal with general commercial litigation disputes, with a particular specialism in contentious trust and probate matters.

What drew you to Pannone?

I applied for a training contract with six Manchester firms. Pannone was one of them and stood out as being a full-service law firm, which was good for me as I didn’t know which area of law I wanted to specialise in at that time. In the end, it was the feel of the firm and the people that really attracted me. Pannone was the first of my second interviews for a training contract (a kind of ‘speed date the partners’ over lunch event, which sounds horrendous, but wasn’t too bad!) and I was offered a training contract.  I said I wanted to do a few more interviews before deciding, but after an assessment centre at a large Manchester firm, where it was clear to me the people weren’t as in tune with me as those at Pannone, I came outside, rang Pannone to accept their offer and cancelled my other interviews. I’m pleased to say it’s still the people that make the firm to this day.

What route did you go down, in terms of training and qualifications?

After my A-levels in English Literature, History and Politics, I didn’t want to do any of those as a degree on their own, so I opted for law, which encompassed elements of them all. However, I wasn’t actually planning on going into law as a profession at that time! I did my law degree at Oxford and then had a year out, where I was supposed to be playing rugby in France. Unfortunately, that didn’t work out due to a knee injury. In the end, I went back to Oxford and did a Masters in Criminology – in part to bide me some time to decide what I wanted to do for a career and also to try and get a rugby union blue (but an early season arm break put paid to that!). I applied for training contracts whilst doing my Masters and was offered one at Pannone just before I started my LPC back up in Manchester at Manchester Met. After that I did a stint as a paralegal at Pannone and then began my training contract.

Why did you choose this route?

I guess it was a case of finding my way as I went along. It just took me a bit of time to decide that being a solicitor was a decent fit for me. All in all, the slightly longer approach into the profession has probably made me more well-rounded. 

What’s the most satisfying aspect of your job?

I enjoy working with people and particularly the people at Pannone. It’s nice to see more junior fee earners progress and grow in confidence. In a more, pure work capacity, I’m lucky that my contentious probate cases often give me an opportunity to make a real tangible difference to people’s lives, often in very sad or distressing circumstances for them. That can be very rewarding.

What does a typical day look like?

A typical day can often be hectic and is often changeable! My ‘to do’ list alters three or four times a day, most days. I’ll try and get some smaller jobs out of the way first thing and may need to set some time aside for a chunkier piece of work such as drafting a long letter of claim, or preparing instructions to counsel. There’ll normally be an element of supervision in there too: reviewing work done by junior lawyers in the team. Some of my time will be spent on business development issues and no doubt I’ll have a few phone calls and multiple emails in the day as well. Perhaps less frequently I may have a client meeting, conference with counsel, a mediation or even a court hearing and, if I’m lucky, the odd client lunch as well!

What are your career ambitions?

I’ve always had the philosophy of just getting my head down, working hard, and trying to be a good employee to have in the firm! By doing that I’ve always trusted that I would be rewarded at the right time with progression. Thankfully that’s tended to be the case and I’ve progressed each time I’ve felt ready to. Where I’m at now is a good place to be and if I keep on progressing as I am, then one day I’d hope to join the partnership.

If you were managing partner for the day, what’s the first thing you would do? 

I’d look to set up some kind of fun team building event. Being from a sporting background (rugby), I think building team spirit is essential to a positive and productive environment and building relationships within the workplace only leads to a better culture and then better service delivery. I’d also allow everyone a Friday afternoon in the sun at Dukes (the pub) – also important for team building!

What would you be doing if you didn’t have a career in law? 

If you’d asked me this when I was younger I’d have said a professional rugby player, but now with three children of my own, it would probably be some form of teaching, or writing children’s books! As it is, I’m limited to coaching the ‘Tiny Tacklers’ at my local rugby club, Burnage, on Sunday mornings in the rugby season.

What can lawyers / the legal profession do to better support clients? Does anything need to change?

The one thing I’ve learned to improve on over time, which I know clients appreciate, is the provision of information. Clients just want to know where things are up to and to be kept informed and updated. Clearly there will be times when you’re busy and you take longer to return pieces of work to clients. I’ll regularly try to send a few short emails at the end of a day if my timescales have slipped to let the client know. They’re generally okay with that and are grateful to be kept informed rather than having to chase. I think this is an area of client service a lot of solicitors can improve on.

Outside of work, what do you enjoy doing?

I lead a busy life with my wife Karen and our three children: Tessa (10), Tilly (7) and Toby (4). I love spending time with them and they’re a lot of fun, but it’s non-stop running around after them! Aside from that, spending time with our friends is also important to me, as is exercise. I’ve just finished playing rugby regularly with my club’s third team and am getting into CrossFit, cycling, and dabbling at golf! If you know anyone who could clone me to free up some more time to do all the above that’d be good!

Do you have any particular skills/talents that your work colleagues may not know about?

I read a good bedtime story… and have also written a few children’s picture book texts over the years as a bit of a hobby, some examples being: ‘Nacho Newt and his Parachute’, ‘Flamingo Joe’, ‘The Gnome that Left Home’ and ‘When a Fisherman Caught an Astronaut’! I’ve not written any for a while though, so maybe I need to get back into it! Then I just need to find a good illustrator to bring them to life!

Where do you live?

I live in Heaton Chapel in South Manchester near Stockport. There are quite a few from the office who live in the Heatons and it’s a great place to live – only 10 minutes on the train to Manchester, close to the airport, lots of bars and restaurants, the Savoy cinema, my rugby club and a great community spirit!

Culture is everything and it was one of the key drivers in Kenneth Tang choosing to join Pannone in October 2021.

“The firm’s culture is centred around approachability, both for clients and for its staff,” explains Kenneth. “Before joining, I read that the firm was considered a leading alternative to national practices. This really came through during my interview for the role.”

The quality of work and the team structure were also important factors for Kenneth. “Pannone offered me the chance to work within a firm that carried out high quality commercial work,” says Kenneth. “The team’s structure promotes collaborative working, where partners are directly involved in cases – which is really beneficial for junior members of the team.”

Six months into the role, we caught up with Kenneth as part of our series ‘My Life in Law’, and talked about his role as a solicitor in the Dispute Resolution team, specialising in real estate litigation.

Tell us a little bit about your background, before joining Pannone?

“Prior to qualifying, I worked as a Court Advocate, before becoming a paralegal,” Kenneth explains. “I was a trainee at Stephensons Solicitors, where I had seats in the commercial litigation and discrimination departments.”

“In that role, I advised on a number of matters, including general commercial contracts, restrictive covenants, property disputes, and professional negligence. I was heavily involved in a case that went to the Court of Appeal, which became one of the leading authorities on seeking interim relief against public bodies.”

Kenneth graduated from the University of Manchester with a degree in Ancient History. He then went on to study the GDL at the University of Law before going on to do the LPC at BPP University.

Now as a fully-fledged solicitor, Kenneth is getting stuck into the role in the Dispute Resolution team. The most satisfying aspect of Kenneth’s role is tackling ‘new and interesting issues’ every day.

“So far, I’ve been involved in a wide range of disputes, including lease termination and renewal, adverse possession, easements, forfeiture, breach of covenant, as well as residential and commercial possession,” he says. “Other areas of work include breach of contract, breach of warranty, debt recovery and unjust enrichment.”

The role is vast and varied, and when asked what a typical day looked like, Kenneth responded saying “emails, emails and emails.”

Looking forward, what are your career ambitions?

“My immediate goal is to become an integral part of the very talented team at Pannone Corporate. I want my practice to be built on being more frank and open with clients. Clients need lawyers to be their advisers, not their friends.”

Outside work, Kenneth enjoys films and sport. “My favourite film is Christopher Nolan’s The Dark Knight, and my favourite football team is Liverpool FC (my dad named me after Kenny Dalglish!),” says Kenneth.

While Kenneth is building a reputation in Dispute Resolution, there is one particular skill that his work colleagues may not know about him. “I grew up near Blackpool’s promenade and became very good at arcade games,” admits Kenneth. “Time Crisis is a game I am particularly adept at!” As one of the most celebrated arcade shoot-em-up franchises ever made, that’s not a bad game to excel at!