tool case

Butler Machine Tool Co. Ltd. v. Ex-Cell-o Corp. Ltd.

Butler Machine Tool Co. Ltd. v. Ex-Cell-O Corporation [1979] 1 All E.R. 965, 1 W.L.R. 401, known as the "battle of forms" case, is a landmark decision of the Court of Appeal in English contract law.

Background

On May 23, 1969, Butler Machine Tool offered to sell a machine tool to Ex-Cell-O. As part of the written offer the offeror was given precedence over any terms in the buyer's order. In reply to the offer Ex-Cell-O made an order for the machine on different terms. At the bottom of the order was written that that they accepted the order "on the Terms and Conditions stated". Butler replied, writing that the order was to be delivered "in accordance with our revised quotation".

Ex-Cell-O experienced some delay and could not accept the machine tool on time. Butler invoked the price increase clause for the period after which they had agreed the machine would be delivered. Ex-Cell-O refused to pay the extra charge and so Butler sued for breach of contract. Ex-Cell-O argued that the price increase clause was not part of the agreement. At trial the judge found in favour of Butler.

Remarks

As a result of the majority ruling in the Butler Machine Tool case, English law continues to approach the issue of the battle of forms from the viewpoint of analysing the communication between the parties to see if it can be discerned into an offer and acceptance.

An example of a different theoretical approach to resolving the “battle of forms” issue can be found in Article 19 of the Vienna Convention for the International Sale of Goods, which provides:

  1. A reply to an offer which purports to be an acceptance but contains additions, limitations or other modifications is a rejection of the offer and constitutes a counter-offer.
  2. However, a reply to an offer which purports to be an acceptance but contains additional or different terms which do not materially alter the terms of the offer constitutes an acceptance, unless the offeror, without undue delay, objects orally to the discrepancy or dispatches a notice to that effect. If he does not so object, the terms of the contract are the terms of the offer with the modifications contained in the acceptance.
  3. Additional or different terms relating, among other things, to the price, payment, quality and quantity of the goods, place and time of delivery, extent of one party's liability to the other or the settlement of disputes are considered to alter the terms of the offer materially.

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