Butler Machine Tool v Ex-Cell-O Corporation [1979] is the leading authority on the “battle of the forms”, a common offer and acceptance issue. It stands for the principle that the “last shot” will usually win — the final terms agreed to are the ones that govern the contract.

Facts of the Case

Butler Machine Tool Co. Ltd offered to sell a machine tool to Ex-Cell-O Corporation for £75,535. The sellers’ quotation included their own terms, featuring a price variation clause and a statement that their terms would prevail over any the buyer might impose. The buyers replied with an order containing their own terms, which did not include a price variation clause, and featuring a tear-off slip for the sellers to sign and return stating the order was accepted on the buyer’s terms. The sellers signed and returned the slip. After delivery, the sellers tried to invoke the price variation clause to claim an additional £2,892.

Legal Issues

Which set of terms prevailed — the seller’s (with the price variation clause) or the buyer’s (without it) — and whether the “battle of the forms” should be resolved using ordinary offer-and-acceptance principles from Hyde v Wrench, or reformulated for modern commerce.

Judgement

The Court of Appeal (the majority, Lawton and Bridge LJJ) decided the case on the traditional principles in Hyde v Wrench. The buyer’s order was not an acceptance but a counter-offer, because it did not unequivocally agree to the seller’s terms; this counter-offer “killed” the seller’s original offer. By signing and returning the tear-off slip, the sellers had unequivocally assented to the counter-offer. The contract was therefore on the buyer’s terms, and the sellers were not entitled to the extra payment.

Authority

Butler Machine Tool is the leading authority for the “battle of the forms”: the traditional model of offer and counter-offer applies even in complex business exchanges, and the party firing the “last shot” — the final terms then accepted by the other party — usually wins.

Related Discussion and Commentary

  • Lord Denning’s alternative: agreeing in the result, Lord Denning MR thought the traditional approach “out of date”, proposing a two-stage approach — first ask whether the parties agreed on material points, then resolve minor discrepancies or “scrap” irreconcilable terms in favour of a reasonable implication.
  • Certainty vs. flexibility: the majority’s approach offers certainty by requiring complete assent; Lord Denning’s is criticised for letting judicial discretion effectively “write the contract” and create commercial uncertainty.
  • Practical realities: strict principles can produce “stark results” where a contract is denied over slight discrepancies even after work has begun, highlighting the difficulty of drawing the line between minor irreconcilable terms and a lack of consensus ad idem.