The "battle of the forms" under the Uniform Commercial Code

If your business involves buying or selling goods, then there is a good chance that your company uses purchase order forms or order acknowledgement forms, or receives such forms from business customers or vendors, or both. Have you ever looked at the reverse of these forms, particularly the ones you receive from other companies? What you see may surprise you.

Standardized forms for purchasing and selling will typically have on their reverse "standard terms and conditions" written in small print. Because these forms are meant for generic use and are not negotiated between you and your business partner, the attorneys who write the terms and conditions based solely from the perspective of representing only one side to the transaction. The result is a document that is a document that protects only one side to the transaction, and attempts to place the other side at a disadvantage in the event of a dispute. This can lead to awkward questions when, for example, your purchase order form and your vendor's order acknowledgement form both have terms and conditions on the back that are starkly different from each other. Resolving these conflicts is known among attorneys as the "battle of the forms".

There are two possible ways to resolve conflicts between these kinds of one-sided forms. The first is to negotiate an overarching agreement between your company and your business partner company that supersedes the terms and conditions of subordinate forms. The other way is built into the Uniform Commercial Code as it exists under Illinois law. The UCC has built-in rules to resolve conflicting terms between forms. Moreover, if need be the UCC will also if need be provide its own terms and conditions to prevent the transaction from collapsing if the conflicting terms and conditions effectively neutralize each other.

This post is meant only as an introduction to how the battle of the forms can arise and how it can be avoided or solved. Understanding what the battle of the forms is and ways to avoid or resolve it is something that a business and commercial law firm can help you with if you have questions on this subject or if you need legal assistance in a business dispute involving standard terms and conditions.

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