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Facts[]

Butler Machine Tool Co. made and sold machine tools. They sent a letter to Ex-Cell-O on May 23, 1969 offering Ex-Cell-O some new machinery for £75,535. With it, was Butler's standard contract terms which included a price variation clause, so if their manufacturing costs went up, that price rise would be passed on to Ex-Cell-O. Ex-Cell-O replied on May 27 and said they would order the machinery, but on Ex-Cell-O's own standard terms. Ex-Cell-O's standard terms did not have a price variation clause. Butler replied on June 5 on the tear-off slip from Ex-Cell-O's terms. At the bottom of this slip it read, "We accept your order on the terms and conditions stated therein" however Butler added a letter reasserting that the price was being entered in accordance with the sellers quotation from the May 23 letter. A while later, nothing further had been said, and Butler delivered the machinery. They asked for £75,535, plus £2,892 according to their price variation clause. Ex-Cell-O refused to pay the extra. Butler sued Ex-Cell-O. The lower court held that the seller's price variation clause continued through the whole dealing and so the sellers were entitled to rely upon it.

Issue[]

  1. On whose terms was the contract made?
  2. is butler breaching the contract?

Decision[]

Appeal allowed, judgment for the buyers.

Reasons[]

Denning laid out the traditional test for the contract: the quotation of the price was an offer subject to terms and conditions and the order by Ex-Cell-O constituted a counter-offer which Butler accepted. However he also lays out a "better way" to analyze such situations applying an objective test of the conduct and language. Lord Laughton & Bridge discuss general principles of offer & acceptance and determine that generally in such situations the last of the forms (the "last shot") is the victor. They find the tear away slip being returned as the offer being accepted from the buyer's and their terms, and find the letter that accompanies this from the seller to be just reiteration of price.   

Ratio[]

  • In a battle of forms generally the last shot wins.

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