Purchase order forms should have standard terms and conditions of purchase printed on the reverse. Suppliers frequently have conditions of sale or supply printed on their Acknowledgement of Order forms, invoices etc. Where there is an order and an acceptance both communicated on the standard forms, the question may arise as to whose terms and conditions apply - hence the Battle of the Forms.
- Where the supplier has responded to a RFQ or RFT, the buyer accepts the offer when the order is placed or the buyer's acceptance is communicated to the supplier. The buyer's terms and conditions are accepted at this stage and any further terms and conditions, introduced after this stage, have no legal effect.
- If a buyer places an order on a standard Purchase Order form and receives an acceptance of order with the supplier's terms and conditions on it, then the supplier has not, in fact, accepted the order but has made a counter offer. If the goods are delivered, this constitutes acceptance of the counter offer and the contract is on the supplier's terms.
In general, therefore, the buyer's terms and conditions, signed by the potential supplier, when submitting a quotation or tender will apply to the contract. Orders placed off catalogues, prices lists, the Internet etc will normally be under the terms and conditions printed on the last document prior to the acceptance of the goods or services, which is likely to prevail if any dispute arises. You should endeavour to ensure that the last such document is yours. For example, if in response to an order you receive an order acceptance form with a supplier's conditions attached, you should, where possible, respond that your order is to take effect according to your terms and conditions.
Where the order involves a substantial sum, the only really satisfactory solution is to negotiate and reconcile any differences in terms and conditions before any contract is entered into.
If you are in any way concerned about whose terms and conditions of contract apply to a specific procurement, please seek advice from your Head or Procurement