Contract Formation and Battle of the Forms

The legal requirements of a building contract or construction contract, like any commercial contract, include:

• Offer: a clear and definite proposal by party A to party B that is specific and capable of acceptance.
• Acceptance: unequivocal acceptance of the terms of the offer by party B.
• Consideration: each party must provide something of value to the other, whether a promise to do (of refrain from doing) something, to provide goods or services or to make payment.
• Intention to create legal relations: each party must intend their agreement to be legally binding.

In addition, the contracting parties must have legal capacity to enter the contract and the purpose of the contract must be legal.

Standard Forms of Contract

The introduction of standard forms of contract in the construction sector was intended to streamline the process, reduce costs and promote consistency in project delivery.

In practice, most contracting parties have their own standard terms which they seek to incorporate into any building contract or construction contract, including crucial terms in relation to payment, dispute resolution and liability.  

This can give rise to a “battle of the forms”.

Battle of the Forms

The classic example of a “battle of the forms” is where one set of terms and conditions is identified in a tender offer, and another is identified in a purchase offer.

If a “battle of the forms” dispute arises, it becomes the function of the court to construe which, if any, is the operative set of conditions.

In Trebor Bassett Holdings Ltd v ADT Fire & Security Plc [2012] EWCA Civ 1158 a material “battle of the forms” dispute arose. ADT's terms included a cap on its liability of £13,781.60, whereas Cadbury’s claim was valued at £110 million.

Mr Justice Coulson adjudged that the case was, on a proper analysis, indistinguishable from the traditional approach adopted in Tekdata Interconnections Limited v Amphenol Limited [2009] EWCA Civ 1209, in which the court held:

“… in a 'battle of forms' case, the traditional analysis based upon offer and acceptance had to be adopted, unless the documents passing between the parties and their conduct showed that their common intention was that some other terms were intended to prevail. The Court of Appeal held that it would be difficult to displace the traditional analysis, unless it could be said that there was a clear course of dealing between the parties.”

Mr. Justice Coulson concluded that Tekdata provided “… a complete answer to the issue as to the appropriate terms and conditions” and determined that:

• Trebor’s quotation was based on their terms and conditions and was, on any view, an offer.
• Cadbury’s Purchase Order was based on their terms and conditions (which were very different to the Trebor terms and conditions) and was therefore a counteroffer.
• As there was no further exchange of contractual documentation, and the work was done pursuant to the last document in the chain (i.e. the “last shot” fired) – the work had been carried out pursuant to Cadbury’s Purchase Order.
• In the circumstances, conventional analysis dictated that Cadbury’s conditions applied.

Written Communications

The requirement for parties to be careful in their approach to written communications in the context of contract negotiations was neatly highlighted in Jaevee Homes Limited v Mr Steve Fincham (t/a Fincham Demolition) [2025] EWHC 942 (TCC).

Mr Roger Ter Haar KC, sitting as a Deputy High Court Judge, determined that a concluded contract had been formed for demolition works by way of written communications, including email and WhatsApp messages and that the terms of a subsequent written short-form subcontract had not been incorporated.

Discussion

Generally, the traditional approach to contract formation will be applied by courts and the terms and conditions of the party who fired the “last shot” will usually prevail; however, contracting parties should be alive to exceptions to the general rule in relation to common intention and/or course of dealing.

Project teams should negotiate contract terms thoroughly and ensure that all parties have agreed the specific terms of contract, before work commences. If a contract includes reference to terms which have not been supplied, those terms should be requested forthwith and any unacceptable terms rejected immediately.  

Parties negotiating a contract should be aware that a concluded contract can be formed through conduct and/or verbal and written communications, including communications via WhatsApp. Parties should consider marking such communications “subject to contract” to avoid inadvertently forming a contract before a final written document has been settled.

Legal Assistance

If you are engaged in a contract dispute or need support to negotiate contract terms, including drafting bespoke amendments to standard form contracts or dealing with amendments proposed by a counterparty, we can help.  

We recognise that every contract is unique and strive to offer pragmatic, tailored and creative solutions and to maximise outcomes for our clients.

How to Get in Contact

For further assistance with drafting or resolving disputes concerning building contracts or construction contracts, please contact Paul O’Donnell at paul.odonnell@ilaw.co.uk or call 07521 417579.

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