This Wisdom of the Crowd (ACC member discussion) addresses battle of the form situations between a seller's standard terms and conditions, and terms mentioned on the buyer's purchase order. This resource was compiled from questions and responses posted on the forum of the IT, Privacy & eCommerce ACC Network. (Permission was received from ACC members quoted below prior to publishing their comments in this Wisdom of the Crowd Resource)
Question
Our customers either click through our terms and conditions (T&C) online at the point of order, or sign a paper order form that links to our T&Cs online. If the T&Cs are negotiated by the customer, they are then attached to the order form.
To tackle the Purchase Order (PO)/battle of the forms issue, our T&Cs include the following clauses: "This Agreement supersedes all prior proposals, negotiations, representations, agreements and understandings between the parties, including those contained in any confidentiality agreements, and all terms and conditions contained in any Customer-provided purchase orders, and constitutes the complete and exclusive agreement between Customer and Company regarding the subject matter hereof, and the Customer acknowledges that it has not relied on any statement, promise or representation made or given by or on behalf of the Company which is not set out in this Agreement. Any reference to a purchase order or similar documentation on an invoice or other acceptance thereof is solely for Customer's convenience in record keeping, and no such reference or the provision of Services to Customer shall be deemed an acknowledgement of or agreement to any terms or conditions associated with any such purchase order or other Customer-provided documentation. Any such associated terms and conditions shall be of no force and effect, and shall not in any way be deemed to amend, modify, supersede, alter or supplement this Agreement."
Nevertheless, our concern is that by accepting the customer's PO where their PO terms are either attached to the PO or referred to online, we may be negating our own terms or calling into question which terms actually apply. The POs generally come in after services have been rendered, and we have asked our sales team to push back and either try to strike the references to the customer's terms, have the customer remove their terms or include a reference to our terms that the customer has already agreed to. Our sales team has been receiving tremendous pushback from our customers and it often results in their holding up payment (and their legal teams insisting that their terms apply). How have others dealt with this scenario?
Response #1: We have seen this problem also- where customers negotiate terms and conditions specific to their purchase and then are concerned that those individually negotiated terms and conditions are overwritten by the terms and conditions online which are linked to in the purchase order.
Upon request, I've put in language to say that in the event of a conflict between the customer's negotiated terms and conditions and those available online, the negotiated terms and conditions will prevail.
Response #2: We also have this problem... even after negotiating a specific contract, and even when we're using the customer's master agreement as a starting point. We've had success asking the procurement team/whoever is issuing the PO to add a line to the PO with order of precedence language. Something like "This PO is subject to the terms of the ___________ Agreement between the parties as of _________".
Many PO's also have that language hidden somewhere, but I like to be specific for the very reason you mention.2
Response #3: One thing to think about with the conflict language -- sometimes there is no actual conflict between the PO terms and the contract (say, for example, the contract has no indemnification provision and the PO terms do include one -- there is no actual conflict). We have changed our standard language from saying that if there is a conflict, the contract prevails to saying in our master contract: "No terms, provisions, or conditions of any purchase order will have any effect on the obligations of the parties under or otherwise modify this Agreement."
1Anonymous (Mar. 24, 2016)
2Jennifer Dumas, Vice President, Legal, Chef Software, Inc. (Mar. 25, 2016)
3Anonymous (Mar. 25, 2016)
Region:
United States
The information in any resource collected in this virtual library should
not be construed as legal advice or legal opinion on specific facts and should not be considered representative of the views of its authors, its sponsors, and/or ACC. These resources are not intended as a definitive statement on the subject addressed. Rather, they are intended to serve as a tool providing practical advice and references for the busy in-house practitioner and other readers.