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INTERNATIONAL APPROACHES AS PLAUSIBLE SOLUTIONS TO

RESOLVE THE BATTLE OF FORMS UNDER THE INDIAN LAW OF


CONTRACT

ABSTRACT
The Indian court’s rigid application of the last-shot rule to resolve the predicament of
the battle of forms among conflicting standard terms in domestic disputes has resulted
in unreasonableness and has fostered the conclusion of contracts in bad faith.
Likewise, although there is substantial evidence to prove the existence of party
autonomy in the choice of law and jurisdiction under Indian private international law,
its courts have failed to delineate a coherent solution for “battles” arising on these
aspects. The paper thus examines the plausibility of employing the solutions
prescribed by the UNIDROIT’s Principles on International Commercial Contracts and
the Hague Conference on Private International Law’s Hague Principles on Choice of
Law in International Commercial Contracts on the subject, as gap-fillers to interpret,
supplement or develop the Indian national and private international law.

Keywords: the battle of forms, offer, acceptance, counter-offer, standard terms,


Indian Contract Act, 1872, Indian private international law.

A INTRODUCTION
The term ‘battle of forms’ refers to the predicament that arises when the parties
exchange standard terms that contain contradictory clauses, to conclude their contract.
More often than not, the parties do not pay much attention to the clauses mentioned in
the standard purchase order provided by the other party. Consequently, the buyer and
the seller initiate performance on what they construe to be the terms of the contract.
Litigation on these aspects can often become extremely complex when the adjudicator
has to decide whether, in the first place, the contract was, in fact, concluded given the
existence of the conflicting clauses; and if it was, then which party’s terms would
govern the performance of the contract. In the absence of a uniform standard to assess
these aspects, solutions to resolve the battle of forms have varied, depending on the
jurisdiction that is called upon to decide the dispute over the performance of the
contractual obligation.
The International Institute for the Unification of Private Law [UNIDROIT]1 via its
Principles on International Commercial Contracts [the UPICC] has endeavoured to
harmonise this approach by offering a predictable solution to resolve such ambiguities

1
For a more detailed understanding on the structure of the UNIDROIT, see, Jan Kropholler,
Internationales Einheitsrecht: Allgemeine Lehren (Mohr Siebeck 1975) 57-59 (translated from German
original); Stefan Vogenauer, ‘Introduction’ in Stefan Vogenauer (ed), Commentary on the UNIDROIT
Principles of International Commercial Contracts (PICC) (Oxford University Press 2015) 7-15; and
the UNIDROIT website, <www.unidroit.org/about-unidroit/overview> accessed 16 August 2017.
that have arisen due to conflicting standard terms at the substantial law level. In
addition, the Hague Conference on Private International Law’s Hague Principles on
Choice of Law in International Commercial Contracts [the Hague Principles] 2
prescribes yet another innovative approach to tackle the predicament of the battle of
forms for contradictory choice of law clauses in international commercial contracts.
The purpose of this paper is to analyse whether Indian courts should employ the
suggested solutions to the battle of forms as outlined in the UPICC and the Hague
Principles as gap-fillers to interpret, supplement or develop the country’s contract
law. Against this backdrop, this paper is structured as follows: Part two would briefly
outline the varying approaches to resolve the tussle of conflicting standard terms at
the domestic level and elucidate the relevance of the UPICC and the Hague
Principles’ efforts to harmonise this solution. Part three would subsequently focus on
the battle of forms problem under the Indian law of contract. While gaining some
additional perspective from the relevant case law, this section would deliberate
whether the Indian courts would be better equipped to resolve the battle of forms if
they begin to rely upon the UPICC’s and the Hague Principles’ solution, to interpret
and develop its national and private international commercial law, respectively. Part 4
would provide the concluding remarks.

B EXISTING SOLUTIONS TO THE BATTLE OF FORMS


1 Traditional approaches: an overview
As aforementioned, in the absence of any uniform standard to determine the
resolution of the battle of forms, the approaches have varied at the substantive law
level depending on the jurisdiction that is called upon to decide the matter. Apropos,
there are broadly three basic approaches to the battle of forms at the domestic level.
a) the last-shot rule - the application of the last-shot rule coincides with the
mirror-image rule which stipulates that the acceptance of the offer must be absolute
and unconditional. 3 This approach has traditionally been followed in England and
other common law systems. In the absence of any explicit provision on the battle of
forms, the regular provisions in the contract law on offer and acceptance aid in
2
For the history of the project, see, Jan L Neels, ‘The Nature, Objective and Purposes of the Hague
Principles on Choice of Law in International Commercial Contracts’ [2015] 4 Journal of South African
Law 774, 774-775; and <www.hcch.net> accessed 16 August 2017.
3
See, Hyde v Wrench, [1840] EWHC Ch J90. Also see generally, John Cooke & David W Oughton,
The Common Law of Obligations (3rd edn OUP 1993) 30; and Guenter H Treitel, An Outline of the
Law of Contracts (6th edn OUP 2005) 10.
resolving the issue. Thereby, the essentialia negotii of the offer that contains the
price, quantity, delivery, etc. – also referred to as the dickered terms must be accepted
in total together with the standard terms stipulated in the purchase order – and
referred to as the boilerplate terms. 4 Consequently, the contract would not be
concluded if the acceptance does not precisely match the terms of the offer.5 Such
negotiation is instead only a counter-offer6 and is most typically offered by the seller.7
The only exceptions to this rule under the English law of contract are when the
counter-offer merely contains a meaningless term or a term that is implied by law or
is in fact, a suggestion.8 If however, the other party, which is invariably the buyer,
accepts the counter-offer either explicitly or by conduct, such as by receiving
delivery, the contract is purported to have been concluded on the terms of the offeror9
- mostly the seller – who fired the last shot.10 Furthermore, the party in receipt of such
an offer would additionally be deemed to have assented to the standard terms, if any,
of the party who fired the last shot.11
In a related vein, Article 19 of the United Nations Convention on Contracts for
the International Sale of Goods (CISG),12 which prescribes a solution to the battle of
forms, has also sometimes been understood to adopt the last-shot rule.13 Accordingly,

4
Victor P Goldberg, ‘The Battle of Forms: Fairness, and the Best-Shot Rule’ [1997] 76 Oregon Law
Review 155, 159.
5
Hyde v Wrench, (n 3); Cooke & Oughton, (n 3), 10; Edward J Jacobs, ‘The Battle of Forms: Standard
Contracts in Comparative Perspective’ [1985] 34 International and Comparative Quarterly 297, 297 et
seq; and Treitel (n 3), 11.
6
ibid.
7
Alan Farnsworth, Farnsworth on Contracts (3rd edn, Aspen Publications 1990) 273-274. Also see,
Goldberg, (n 4), 160; and Giesela Rühl ‘The Battle of Forms: Comparative and Economic
Observations’ [2003] Univ. Pennsylvania Law Review 189, 190-191.
8
See, Jacobs (n 5) 299; and Rühl (n 7) 192.
9
Treitel (n 3) 10.
10
Farnsworth (n 7) 273-274; and Goldberg (n 4) 160.
11
But see, Butler Machine Tool Co. Ltd. v Ex-Cell-O Corp (England) Ltd, [1979] 1 All ER 965, 968,
per Lord Denning, which criticised the strict application of the last-shot rule. cf Tekdata
Interconnections Ltd v Amphenol Ltd [2010] 2 All ER (Comm) 302 (CA) 307, per Longmore LJ, which
subsequently reaffirmed that the traditional rules of offer and acceptance must be adopted unless the
documents exchanged between the parties show a different intention.
12
United Nations Convention on Contracts for the International Sale of Goods, 1489 UNTS (1988)
[CISG].
13
See, Cesare Massimo Bianca and Michael Joachim Bonell, Commentary on the International Sales
Law: The 1980 Vienna Sales Convention (1st edn, Fred B Rothman and Co 1987) 80; Alan Farnsworth
‘Article 19’ in Cesare Massimo Bianca and Michael Joachim Bonell (eds) Commentary on the
International Sales Law: The 1980 Vienna Sales Convention (1st edn, Fred B Rothman and Co 1987)
175; Clark Kelso, ‘The United Nations Convention on Contracts for the International Sale of Goods:
Contract Formation and the Battle of Forms’ [1983] 21 Columbia Journal of Transnational Law 529,
555; Burt A Leete, ‘Contract Formation under the United Nations Convention on Contracts for the
International Sale of Goods and the Uniform Civil Code: Pitfalls for the Unwary’ [1992] 6 Temple
International and Comparative Law Journal 193, 213-14; Rühl (n 7) 196-198; and Walter A Stoffel,
the CISG also resolves the problem of diverging clauses by relying on the general
rules of offer and acceptance.14 Article 19 stipulates that a contract would successfully
be concluded even if there is a discrepancy between the offer and acceptance15 as long
as it does not materially alter the terms of the contract. 16 The provision further
clarifies that modifications concerning the price, payment, quality, quantity, terms of
delivery, liability and method of dispute settlement would be presumed to materially
alter the terms of the contract – and thus cannot be construed as an acceptance.17
Towards this end, the CISG’s resolution varies slightly from that adopted under
the English law. Accordingly, the CISG does not prescribe a strict application of the
mirror-image rule, which mandates a party to accept the terms of the offer in total, for
a contract to be formed. Although a plethora of the literature has interpreted the
application of the last-shot rule via the CISG,18 in practice, this would largely depend
on the court that has been called upon to decide the matter.19
b) first-shot rule: Article 6.225(3) of the new Dutch Civil Code imbibes the first-
shot rule for resolving the battle of forms in standard term contracts. Therefore, the
clauses in the contract as stipulated in the first set of standard terms would prevail in
total, except when the party to whom these are submitted, expressly rejects the
standard terms prescribed by the offeror.20
Likewise, Section 2-207(1) of the Uniform Commercial Code (UCC) also
prescribes the adoption of the first-shot rule in the USA, as a resolution for conflicting
standard terms – provided the acceptance is in the form of ‘a definite and seasonable

‘La Formation du Contrat’ in Institut Suisse de Droit Comparé (ed) The 1980 Vienna Convention on
the International Sale of Goods, (Zurich: Schulthess Polygraphischer 1985) 55, 73-74.
14
Gyula Eorsi, ‘A Propos the Vienna Convention on Contracts for the International Sale of Goods’
[1983] 31 American Journal of Comparative Law 333, 342, which denotes the provisions on offer and
acceptance in the CISG as a ‘conflict compromise’ between the east and the west or civil law v
common law.
15
See, art 19(1) of the CISG. Also see, arts 14-18 of the CISG.
16
art 19(2) of the CISG clarifies that the inclusion of additional or different terms would not be
considered as a material alteration.
17
ibid art 19(3).
18
See footnote 13 above.
19
Siti Fairuz Binti Nor Azhar, ‘Battle of Forms in the Formation of International Commercial
Contracts: An Assessment of their Comparative Merit’ Vancouver Journal of International Business
and Law (Mock Issue) <viti.ca/journals/index.php/VJIBL/article/view/7/5> accessed 12 July 2017.
20
D Busch et al (eds), The Principles of European Contract and Dutch Law: A Commentary (1st edn,
Nijmegen/The Hague Publications 2002) 123-124.
expression’.21 Furthermore, such acceptance must also not have been ‘expressly made
conditional on assent to the additional or different terms’.22
b) knock-out rule: this approach presents a contemporary solution to the problem
of the battle of forms and has found favour in civil law jurisdictions. This practice is
premised on the principle of good faith and presumes that the parties do not, in fact,
read the clauses that are stipulated in the standard terms. Hence, if the parties
exchange conflicting standard terms, the contract would be concluded even if the
terms of the offeror have not been accepted in total. The agreement would thus come
into existence on the terms of the standard terms of both the parties as long as they are
common in substance and are not in conflict with each other.23 All the other terms that
are contradictory are cancelled, or knocked-out and are instead replaced with the
default rules of the national law. Accordingly, unlike the last-shot and the first-shot
approaches, the knock-out rule does not consider the contract to be formed
exclusively on the terms of one party. The United States, Germany and France are
popular examples of jurisdictions which resolve the battle of forms via the knock-out
approach.
In the United States, a contract may be concluded even if it does not satisfy the
prerequisites stipulated in Section 2-207(1) of the UCC. In such circumstances,
Section 2-207(3) would lead to the application of the knock-out rule if the conduct of
the parties is such that it recognizes the existence of the contract. 24 Consequently, the
contract would be concluded according to the clauses that both the parties have agreed
upon, together with the supplementary terms that are incorporated under any
provisions of the UCC.25
Under the principles of the German law of contract, the knock-out rule will be
applicable only if the party expressly indicates that it just wants to contract on its

21
sec 2-207(1) of the UCC. Also see, Arthur Taylor Von Mehren, ‘The Battle of Forms: A View’
[1990] 38 American Journal of Comparative Law, 265, 277-282.
22
ibid.
23
See, Thomas Kadner Graziano, ‘Solving the Riddle of Conflicting Choice of Law Clauses in Battle
of Forms Situations: The Hague Solution’ [2013] 14 Yearbook of Private International Law 71, 79.
24
See, Mehren (n 21) 282-290; Kevin C Stemp ‘A Comparative Analysis of the Battle of the Forms’
[2005] 15 Transnational Law and Contemporary Problems’ 243, 245 et seq; Bradford Stone & Kirsten
D Adams, Uniform Commercial Code in a Nutshell (8th ed West Academic Publishing 2012) 11 et seq;
and Henry Gabriel, ‘Ending the “Battle of Forms”: A Symposium on the Revision of Section 2-207 of
the Uniform Commercial Code [1994] Business Lawyer 1058.
25
ibid.
terms (that is using a defensive clause).26 Apropos, in the absence of any such express
indication, when the party accept the terms of the contract by conduct – such as by
delivery, the last-shot rule will be applicable.27
Likewise, the French substantive law of contract also adopts the knock-out
approach has. However, unlike the German method, which merely restricts the
application of this doctrine to defensive clauses, the substantive law of contract in
France instead employs the knock-out rule even in instances where the standard terms
are plainly contradictory, and no party has insisted on concluding the contract on its
terms.28

2 Contemporary Approaches
The above discussion highlights the diversity that presently exists at the national level
as regards the resolution to the battle of forms issue. The UPICC attempts to
harmonise these solutions insofar as the conflict arises at the substantive law level
wherein it becomes necessary to adjudicate the terms of the contract on which
performance must be made. At the same time, the complexity of the problem is likely
to intensify in transnational contracts when the standard terms that have mechanically
been exchanged by the parties additionally contain contradictory clauses on their
choices of governing law. Considering that no black letter rule has addressed this
issue, the Hague Principles prescribes a specific solution for such predicaments to aid
the governing forum to discern the law according to which, such disputes should be
decided.29
Towards this end, although the UPICC and the Hague Principles are in the form of
soft law,30 they could eventually assist in bringing a substantial level of harmonisation

26
See, Oberlandesgericht (OLG) Köhl, Betriebs Berater (1980), 1237. For a detailed discussion on the
approach of the German law of contract as regards the battle of forms, see, Peter H Schlechtriem, ‘The
Battle of Forms under German law’ [1968] 23 Business Lawyer 655-669; Rühl (n 7) 201-205; and
Mehren (n 21) 290-294.
27
Rühl (n 7) 204-205.
28
But see, Rühl (n 7) 205-206, which illustrates an instance wherein the French Supreme Court
departed from the knock-out rule, and instead applied the last-shot approach only because the seller’s
standard terms contained a contradictory forum-selection clause which was written in bold and striking
letters. Also see, EH Hondius and Chantal H Mahé ‘The Battle of Forms: Towards a Uniform Solution'
[1998] 12 Journal of Contract Law 268, 270, which refers to the approach adopted by the French
Supreme Court in the illustration mentioned above as the ‘loudest-shout theory'.
29
Graziano (n 23) 82. Also see generally, Thomas Kadner Graziano ‘The Hague Solution on Choice-
of-Law Clauses in Conflicting Standard Terms: Paving the Way to more Legal Certainty in
International Commercial Transactions?’ [2017] 22(2) Uniform Law Review 351-368.
30
Non-binding legal principles are commonly referred to as ‘soft law’. Bonell defines ‘soft law’ as
‘general instruments of normative nature with no legally binding force and which are applied only
on the subject by eradicating the differences in the interpretation of standard term
contracts.

2.1.1. The UNIDROIT’s solution


Created in 1926, the UNIDROIT is an independent, inter-governmental organisation
situated in Rome. UNIDROIT’s whose primary task is to work towards achieving
unification and harmonisation of private law, and in particular, international
commercial law.
The UPICC was first formulated in 1994. They are in the form of a restatement of
transnational contract law31 to provide uniform rules of law to govern international
commercial contracts.32 It draws inspiration from major jurisdictions of the world, and
thus reflects the values of both civil law and the common law. 33 After several
revisions, the UPICC 2016 is the latest version.34 The plausible uses of the UPICC
have been listed in the Preamble, which is structured in seven paragraphs. The
UPICC’s principal aim is to ‘set forth general rules for international commercial
contracts’.35 Other envisaged uses of the UPICC are inter alia, to serve as a useful
source when the domestic law of contract offers different explanations or conversely
has no solution at all to a given problem.36 This potentially appears to be its most
preferred use. Although the UPICC are recommendatory and thus persuasive, its rules
may be employed to interpret or supplement the provisions of the national laws of

through voluntary acceptance’. See, Micheal Joachim Bonell, ‘Soft Law and Party Autonomy: The
case of the UNIDROIT Principles’ [2005] 51 Loyola Law Review 229, 229. Also see, Sieg Eiselen,
‘Globalization and Harmonisation of International Trade Law’ in Faure and Van der Walt (eds)
Globalization and Private Law: The Way Forward (1st Edward Elgar 2008) 97, 123-125.
31
Michael J Bonell, An International Restatement of Contract Law: The UNIDROIT Principles of
International Commercial Contracts (Transnational Publishers, 2005) 9 et seq; and Vogenauer (n 1) 5
32
See, the Preamble to the UPICC, which states, ‘the Principles set forth general rules for international
commercial contracts’.
33
For a more detailed understanding on the UPICC, see, Vogenauer, (n 1) 7-30; Bonell, (n 31) 305 et
seq; and Michael J Bonell, ‘Towards a Legislative Codification of the UNIDROIT Principles’ [2007]
Uniform Law Review / Rev. dr. unif., 233.
34
See, UNIDROIT Governing Council, ‘Summary of Conclusions’ 95 th Session Rome 18-20 May
2016, C.D. (95) Misc. 2, <www.unidroit.org/english/governments/councildocuments/2016session/cd-
95-misc02-e.pdf> accessed 14 August 2017. Also see, UNIDROIT Governing Council, ‘Adoption of
Additional Rules and Comments to the UNIDROIT Principles of International Commercial Contracts
concerning Long-Term Contracts’ 95th Session, Rome [18-20 May 2016]
<www.unidroit.org/english/documents/2016/study50/s-50-misc32-e.pdf> accessed 15 August 2017.
35
The Preamble to the UPICC, para 1, read along with the Official Comments 1 and 2 to the concerned
para. Although the UPICC do not define the term ‘international commercial contract’, from its Official
Commentary, it follows that the term is interpreted to denote a contract, where the relevant elements or
factors are connected with more than one country. Nonetheless, parties are not prevented from applying
the UPICC to a purely domestic contract. As regards the term ‘consumer contracts’, these should be
interpreted in their broadest sense, to include both trade and economic transactions.
36
See, Official Comment 6 to the Preamble to the UPICC.
contract.37 In a related vein, the UPICC may also serve as a model for national laws
for countries looking forward to updating their laws.38
Unlike the traditional approach evidenced in common law jurisdictions, the
UPICC demarcates its solutions depending on whether the conflict has arisen between
dickered terms offered by each party or among boilerplate clauses. Accordingly, the
UPICC imbibes the last-shot rule to resolve conflicts arising between terms that are
stipulated in the main text of the contract, namely the dickered terms – which are
presumed to be read by the parties beforehand. To this, Article 2.1.11 prescribes that a
reply to an offer which contains additions, limitations or modifications would be
construed as a rejection and would constitute a counter-offer unless these do not
materially alter the terms of the contract. Immaterial alterations would consequently
be considered as an acceptance unless the offeror objects to these discrepancies
without undue delay. However, the provision does not clarify what additions,
limitations or modifications would constitute ‘material alterations’, and instead leaves
it to be determined according to the circumstances of each case. The illustrations,
however, provide some clarifications on the manner in which, such alterations should
be interpreted.39 Apropos, if the offeror does not object to the immaterial alterations,
the contract would be concluded on the terms of the counter-offer.
Correspondingly, the UPICC offers a different solution to resolve conflicts
between terms, which are inserted on the reverse side of the contract – popularly
referred to as standard terms.40 In such boilerplate conflicts, the UPICC employs the
application of the knock-out approach via Article 2.1.22. Apropos, in such
circumstances, the contract would be concluded
‘…on the basis of the agreed terms and of any standard terms which are
common in substance unless one party clearly indicates in advance, or

37
See, Official Comment 6 to the Preamble to the UPICC 5-6; Bonell (n 31) 239-241; and Ralf
Michaels, ‘Purposes, legal nature and scope of the PICC’ in Stefan Vogenauer (ed), Commentary on
the UNIDROIT Principles of International Commercial Contracts (PICC) (Oxford University Press
2015) 89, for a list of examples of the provisions of the Principles, which may be used to interpret and
supplement domestic law.
38
The Preamble to the UPICC, para 7, read along with Official Comment 7 to the concerned para. Also
see, Bonell (n 31) 244-246. For a list of national legislation and International Conventions that have
used or can use the UPICC as a model, see Michaels (n 37) et seq.
39
Illustrations to art 2.1.11 of the UPICC.
40
See, art 2.1.19(2) of the UPICC read along with Official Comment 2 to art 2.1.19. The art defines
‘Standard terms’ as ‘provisions which are prepared in advance for general and repeated use by one
party and which are used without negotiation with the other party’. Also see, art 2.1.21 which clarifies
that in the event of a conflict whether a clause is a standard term or not, the latter prevails.
later and without undue delay informs the other party, that it does not
intend to be bound by such a contract’.41
The fulfillment of two pre-requisites is mandatory for Article 2.1.22 to apply. First,
both the parties’ in their exchange of standard terms should have at least agreed on
the essentialia negotii of the offer under Article 2.1.11. 42 Secondly, none of the
clauses contained in either parties’ standard terms should be of such an effect to
‘surprise’ the other party.43 Any such surprising clause will be considered ineffective
by being a material modification and constitute a counter-offer under Article 2.1.11.44
Article 2.1.22 is thus premised on the principle of good faith 45 insofar as it
effectively avoids the exclusive application of one party’s terms from controlling the
contract.46 Article 2.1.19 further clarifies that one party’s standard terms would bind
the other party only when they have been accepted by the latter. 47 This rule is equally
applicable to situations wherein merely one party has incorporated its standard terms
in the agreement. However, Article 2.1.22 permits the application of the last-shot rule
for resolving the inconsistencies between both the parties’ standard terms if one party
clearly indicates to the other, its desire to conclude the contract exclusively on its
terms.48
The rationale behind the distinction in the UPICC’s approach towards conflicts
among boilerplate terms is to favour the formation of a contract if the contradiction
exists exclusively between the standard terms, since the parties may not be aware of
such the same until the performance has commenced.49 Conversely, if standard terms
were subjected to the general rules on offer and acceptance via Article 2.1.11, the
contract would either not be concluded, or it would only be formed on the terms of the
party that fired the last shot. Nonetheless, the UPICC does not clarify the manner in
which, the gap would be filled when the conflicting terms have been knocked out
under Article 2.1.22. The present author opines that the relevant national contract law

41
cf the German approach to the battle of forms under the substantive law of contract elucidated in
Oberlandesgericht (OLG) Köhl, Betriebs Berater [1980] 1237. Apropos, the German courts would
merely invoke the knock-out rule if there is a defensive clause to that effect. In all other circumstances,
the last-shot rule would prevail.
42
art 2.1.19 of the UPICC.
43
ibid art 2.1.20.
44
See illustration 3 to art 2.1.11 of the UPICC.
45
cf art 1.7 of the UPICC.
46
See, Stemp (n 24) 266.
47
ibid Official Comment 3 to art 2.1.19 of the UPICC.
48
See, illustration 2 to art 2.1.22 of the UPICC.
49
ibid Official Comments 2 and 3 to art 2.1.22. Also see, John E Murray, ‘The Definitive “Battle of
Forms”: Chaos Revisited’ [2000] 20(1) Journal of Law and Commerce 41, 43.
would be referred to in such instances – especially since the UPICC is to be used to
interpret and supplement the domestic contract law.50

2.1.2 The Hague Principles’ solution


By and large, the Hague Principles advocate party autonomy in the choice of
governing law.51 In November 2012, the Hague Conference on Private International
Law [the Conference] proposed a solution via the Hague Principles on Choice of Law
in International Commercial Contracts to specifically address the problem of
conflicting choice of law clauses contained in the standard terms exchanged by the
parties.52 Although the Hague Principles are a non-binding set of recommendations,53
which are intended to be used as soft law, they could potentially be relevant to
lawmakers, courts and arbitral tribunals 54 at the domestic level while interpreting,55
supplementing 56 or developing 57 a suitable solution to the battle of forms issue in
transnational contracts.58
In particular, Article 6(1)(b), which is a solution prescribed by a special drafting
group steered by the Conference’s Swiss delegation, states
‘if the parties have used standard terms designating two different laws,
and under both of these laws the same standard terms prevail, the law

50
See, para 6 to the Preamble of the UPICC. But see, Maria del Perales Viscasillas, ‘Battle of the
forms under the 1980 United Nations Convention on the Contracts for the International Sale of Goods:
A Comparison with Section 2-207 UCC and the UNIDROIT Principles’ [1998] 10 Pace International
Review 97, 119; and Daniel Keeting, ‘Exploring the Battle of Forms in Action’ [2000] 98 Michigan
Law Review 2678, 2689-2690, which opines that default provisions in the national law, which would
be invoked by to the knock-out rule may not always lead to the most efficient solution.
51
See, para 1 of the Preamble to the Hague Principles, which limits its application to international
commercial contracts. Also see, art 1(2) of the Hague Principles, which defines a commercial contract
as international
‘unless each party has its establishment in the same State and the relationship of the
parties and all other relevant elements, regardless of the chosen law, are connected
only with that State’.
52
See, Hague Conference on Private International Law, ‘Commentary on the Hague Principles on
Choice of Law in International Contracts’ (approved 15 March 2015)
<www.hcch.net/en/instruments/conventions/full-text/?cid=135> accessed 12 September 2017
(Commentary to the Hague Principles). Also see, Graziano (n 23) 87.
53
ibid.
54
ibid para 4.
55
para 3 of the Commentary to the Hague Principles (n 52), which defines ‘interpretation’ as ‘the
process of explaining, clarifying or construing the meaning of existing rules of private international
law’.
56
ibid. The term ‘supplementation’ has been defined as ‘the refinement of an existing rule of private
international law, which does not sufficiently or appropriately provide for a particular type of
situation’.
57
ibid. The term ‘development’ has been defined as the ‘addition of new rules, where none existed
before, or effecting fundamental changes to preexisting ones’.
58
ibid para 1
designated in the prevailing terms applies; if under these laws different
standard terms prevail, or if under one or both of these laws no standard
terms prevail, there is no choice of law’.
Article 6(1)(b) thus mandates an examination of whether i) the same standard terms
prevail; ii) different standard terms prevail; and iii) no standard terms prevail, under
the designated laws.59 The Commentary elucidates this proposition with the aid of four
scenarios.60 If the jurisdictions to which these parties respectively belong, adopts the
same approach to resolve the issue, then the applicable law would also be decided by
that method.61 For instance, if both the parties belong to jurisdictions which imbibe the
last-shot rule, the battle on the conflicting choices would also be decided by that
method. Accordingly, the forum may possibly apply the last-shot rule if one party
having its place of business in the Netherlands, designates the CISG as the governing
law – which may adopt the last-shot rule via Article 19,62 while the other stipulates the
English law – also adopting the last-shot rule.63
However, if the parties that have designated different laws in their standard terms
belong to jurisdictions which adopt dissimilar rules to resolve this issue, then the
Hague Principles recommends that the forum disregards both these choices and
instead determine the applicable law via the objective connecting factors. 64 For
instance, there will be no choice of law if one party, in its standard terms, designates
the Dutch substantive law of contract (and not the CISG) – which adopts the first-shot
approach, while the other stipulates English Law – which employs the last-shot rule.65
Likewise, there will also be no choice of law if both the parties that have designated
different legal systems belong to jurisdictions, which imbibe the knock-out approach.66
Hence, there will be no choice of law if the parties stipulate German and French law in
their respective standard terms since both these jurisdictions adopt the knock-out rule
to solve the battle of forms. In such circumstances, Article 6(1)(b) prescribes that the

59
Graziano (n 23) 92.
60
See, Commentary to the Hague Principles (n 52).
61
ibid commentary to art 6(1)(b): scenarios 2a and b; and Graziano (n 23) 89-90.
62
See, discussion above in Section B(a) of the present paper, which states that Article 19 of the CISG
could potentially lead to the application of the last-shot rule or the knock-out rule depending on the
forum deciding upon the matter.
63
See, Commentary to the Hague Principles: art 6(1)(b): scenarios 2a and b (n 52); and Graziano (n 23)
89-90.
64
ibid scenario 7; and Graziano (n 23) 97-99.
65
ibid; and Graziano (n 23) 99.
66
ibid scenario 4; and Graziano (n 23) 91.
parties’ choice as regards the governing law will be knocked-out and instead be
determined via the objective connecting factors.67

C THE INDIAN APPROACH TO THE BATTLE OF FORMS ISSUE


1 The Battle of Forms under the Indian Substantive Law of Contract
The Indian substantive law of contract does not delineate any specific provision to
resolve the battle of forms issue. In such circumstances, the Indian judiciary
persuasively refers to the principles of the English common law for interpretational
purposes. 68 Consequently, the predicament of the battle of forms is incidentally
tackled via the existing provisions on offer and acceptance as stipulated in the Indian
Contract Act, 1872. No distinction is made between dickered terms, which contain the
essential terms of the contract and boilerplate terms, which are standardised and have
mechanically been exchanged between the parties.
Apropos, a party to a contract is considered to have accepted the entire offer if it
has ‘signified its assent thereto’.69 Based on the premise of the ‘consensus theory’,70
Section 7 of the Indian Contract Act, 1872 further elucidates that an offer would only
be converted into an enforceable contract 71 when the acceptance is ‘absolute and
unqualified’.72 As a result, the acceptance must identically correspond to the terms of
the offer 73 wherein both the parties have agreed upon the same thing in the same
sense. Such acceptance should be conveyed to the offeror in some ‘usual or
reasonable manner’ 74 – such as explicitly by words or implicitly, such as by the
conduct of the party to whom such offer was made.75
If the purported acceptance contains any qualifications or variations to the
material terms included in the original offer, it would be considered as a counter-offer
and not create any legal obligations on either of the parties. 76 To conclude a valid

67
ibid.
68
Satyabrata Ghose v Mugneeram Bangur & Co [1954] SCR 310. Also see, Superintendence
Company of India (P) Ltd v Krisha Murgai, AIR 1980 SC 1717, 1721-22
69
sec 2(b) of the Indian Contract Act, 1872.
70
See, Phosphate Company Ltd v Emirates Trading Agency, 2016 SCC Cal 5067, para 34.
71
cf sec 2(h) of the Indian Contract Act, 1872.
72
ibid sec 7(a).
73
See, Haji Mohd Haji Jiva v E Spinner, ILR (1900) 24 Bom 510 per Sir Jenkins CJ. Also see, Avatar
Singh, ‘Law of Contract and Specific Relief’ (12th edn, Eastern Book Company, Lucknow) 37.
74
sec 7(b) of the Indian Contract Act, 1872.
75
ibid sec 9.
76
ibid. Also see, the Supreme Court’s verdict in UP Rajkiya Nirman Nigam Ltd v Indure Pvt Ltd &
Ors, [1996] 2 SCC 667, which clarified beyond doubt that there must be consensus ad idem on the
material terms of the contract.
contract, it would be essential for the party in receipt of the terms of the counter-offer
to accept the same absolutely and unconditionally. 77 For instance, in Zodiac
Electricals Pvt. Ltd. v Union of India and Others,78 the Supreme Court refuted the
respondent’s assertions that the contract was concluded on the terms of its counter-
offer, which had mandated a security deposit of a certain amount and the settlement of
disputes by arbitration.79 The appellant, on the contrary, had proposed via the original
offer that it would be unable to provide any security deposit. The court per Bhagwati
and Sen JJ. clarified that no binding contract had been concluded between the parties
because the appellant had, in its response to the respondent’s counter-offer, further
proposed to extend the period of acceptance of its original offer. 80 In such
circumstances, the appellant’s alleged acceptance of the counter-offer was not
absolute and unqualified as mandated by Section 7 of the Indian Contract Act, 1872.81
As a result, the arbitration agreement, which was incorporated by reference into the
contract would create no legal obligation since the parties were unable to agree upon
the material terms of the contract.82Nonetheless, if the counter-offer proposes only
some changes, which essentially clarify the technical aspects of the proposal, then the
terms of the original offer would continue to prevail subject to (along with) such
modifications that are stipulated in the counter-offer – if accepted.83
In all other circumstances, the material terms of the counter-offer have to be
accepted in total to create a binding contract. Consequently, the Calcutta High Court
in GS Fertilizers Private Ltd v Associated Cement Companies Ltd 84 disproved the
defendant’s act of unilaterally increasing the price after implicitly accepting the terms
of the plaintiff’s counter-offer, which categorically stipulated that the price would
remain firm during the pendency of the offer. The defendant, in casu, had deposited
the plaintiff’s cheque but asserted that it had not accepted the terms of the latter’s
counter-offer. The court emphasised that the Section 8 of the Indian Contract Act,

77
See, Col. DI Macpherson v MN Appanna & Anr, AIR 1951 SC 184 per Saiyid Fazl Ali J., which
underscores that for a counter-offer to create some legal obligation on the parties, it must be approved
by the person in receipt of the same. If it is not so unequivocally accepted, there would be no contract.
78
[1986] 3 SCC 522.
79
ibid 523-525.
80
ibid 525-526.
81
ibid 526-527. Also see, the decision of the Delhi High Court in Ralli Estate Pvt Ltd v NDMC, [2006]
126 DLT 703 (DB).
82
ibid. Also see, UP Rajkiya Nirman Nigam Ltd v Indure Pvt Ltd & Ors, [1996] 2 SCC 667, in which,
the Supreme Court refused to invoke the arbitration clause since the parties had not agreed upon the
material terms of the contract.
83
Fair Air Engineers Corporation Ltd v NK Modi, AIR 1997 SC 533.
84
[2014] 1 High Court Cases (Cal) 32.
1872 85 does not permit the parties to accept merely that part of the counter-offer,
which results in performance, while rejecting the condition subject to which, such
proposal was made.86
The Indian Contract Act, 1872 thus employs the mirror-image rule complemented
with the last-shot approach for resolving the battle of forms issue at the domestic level
in India. 87 No distinction is made between contradictions between each parties’
dickered terms and boilerplate terms. Therefore, for instance, in Mukund Ltd v
Hindustan Petroleum Corporation Ltd, the Bombay High Court refused to uphold the
appellant’s contention disputing the validity of the arbitration agreement, which was
included in the respondent’s standard purchase order. 88 The appellant argued that
since there was no consensus ad idem as regards such (arbitration) agreement, it
should not be bound by the same. Nonetheless, the court per Lodha and Devadhar JJ.
elaborated that the appellant had implicitly accepted the arbitration agreement, which
was incorporated in the respondent’s standard terms since it had already initiated the
performance of the contract on the basis of the respondent’s counter-offer.89 Apropos,
the court stated if the appellant intended to object to the arbitration clause, it should
have indicated the same to the respondent at the time of the conclusion of the
contract.
In a related vein, the Supreme Court in M R Engineers & Contractors Pvt Ltd v
Som Datt Builders Ltd reaffirmed that clauses in the standard terms would ipso facto
become part of the main contract since it will be presumed that the parties intended to
incorporate the same by reference in their entirety.90 Consequently, if the essential
terms of the main contract have been accepted and if the standard terms further
contain any provision, such as for settlement of disputes by arbitration, such clause

85
sec 8 of the Indian Contract Act, 1872 provides:
‘performance of the conditions of proposal, for the acceptance of any consideration
for a reciprocal promise which may be offered with a proposal, is an acceptance of the
proposal’.
86
ibid. Also see, Ramanbhai M Nilkanth v Ghashiram Ladliprasad, ILR [1918] 42 Bom 595; and
Mutual Bank of India Ltd v Sohan Singh, AIR 1936 Lah 790; Union of India v Rameshwarlall
Bhagchand, AIR 1973 Gau 111; Food Corporation of India & Anr Ram Kesh Yadav & Anr, [2007] 9
SCC 531; and Besco Ltd v Union of India, 2017 SCC Del 8558.
87
See, Viscasillas, (n 50) 148, which states that the last-shot rule is an ‘acknowledgment’ of the mirror-
image approach.
88
[2005] Bom CR 21.
89
ibid para 31. Also see, Union of India v Peeco Hydraulic Pvt Ltd, [2002] 65 DRJ 12, in which, the
arbitration clause was held to be valid and binding.
90
[2009] SCC 696, paras 13, 16 and 17.
will apply to the contract. 91 The Supreme Court’s verdict in the present case is
relevant to understand the Indian position because it succinctly clarified the
application of the provisions on ‘offer and acceptance’ vis-à-vis the standard terms.
The court per Raveendran J. thus underscored that clauses in the standard terms are
‘well known in trade circles and parties using such formats are usually well versed
with the contents thereof…’ 92 For this reason, the parties to a contract are not
mandated to make any special reference to the clauses in their respective standard
terms. 93 Instead, the standard terms of the party whose dickered terms have been
accepted, ‘will get bodily lifted’ and incorporated by reference in their entirety into
the main contract.94
Consequently, the party that receives the standard terms would be deemed to have
given its consent to the clauses thereunder if it has accepted the offer or the counter-
offer in accordance with Sections 7 and 8 of the Indian Contract Act, 1872.95 Thereof,
only the ‘composite performance’ of the terms espoused in the main contract (namely
the dickered terms) together with the standard terms will ‘discharge the parties of
their mutual obligations and performances’.96

1.1 Plausible uses of the UPICC to interpret and supplement the provisions on the
battle of forms under the Indian Contract Act, 1872
As aforementioned, one of the envisaged uses of the UPICC is to be used to interpret,
supplement or develop the national laws of contract according to internationally
accepted standards. The UPICC’s solution to the battle of forms is a blend of the
approaches adopted in the civil law and common law jurisdictions. Article 2.1.11 thus
adopts the common law approach of mirror image rule and its last-shot acknowledge
to determine acceptance of an offer.97 At the same time, Article 2.1.22 incorporates

91
ibid para 13.
92
ibid para 23.
93
ibid para 22.
94
ibid para 17.
95
See, clarification provided by the Delhi High Court in Virtual Studio Pvt Ltd v TMT Investment PTE
Ltd, (2014) SCC Del 7002 per Garg J para 10-11.
96
See, the verdict of the Supreme Court in Chloro Controls (I) P Ltd v Severn Trent Purification Inc,
[2013] 1 SCC 641, para 71. Also see, Virtual Studio Pvt Ltd. v TMT Investment PTE Ltd, [2014] SCC
Del 7002, para 9.
97
cf discussion on the last-shot rule adopted in the English law and art 19 of the CISG.
the civil law’s knock-out rule to resolve disputes regarding conflicting standard terms
when the parties have otherwise agreed upon the essentialia negotii of the contract.98
In the Indian context, the country’s substantive law of contract resembles the
UPICC’s approach as delineated in Article 2.1.11, insofar as they both mandate
consensus ad idem on the terms of the offer. Accordingly, for the terms of the
counter-offer to prevail, they must be accepted either expressly or implicitly. 99
Likewise, although the ‘consensus theory’ stipulated in Sections 7 and 8 of the Indian
Contract Act, 1872 imbibes the mirror-image rule, it nonetheless provides some
flexibility to take into account circumstances wherein, in essence, the counter-offer
merely contains changes that intend to clarify the technical aspects of the
performance.100 In this context, the Indian law of contract further corresponds with
Article 2.1.11 of the UPICC, which similarly permits the formation of a contract
irrespective of the incorporation of such additions as long as they do not have the
effect of materially altering the terms of the contract. 101 Accordingly, the last-shot
rule would not apply in such circumstances, whereby the terms of the original offer
would continue to prevail in addition to the modifications stipulated in the counter-
offer, which have been accepted.
The provisions on the battle of forms in the Indian Contract Act, 1872, however,
differ from the UPICC in one significant aspect. Thus, while the UPICC’s solution
depends on whether the dispute has arisen between the dickered terms or boilerplate
terms, the strict application of the rules on ‘offer and acceptance’ under Sections 7
and 8 of Indian Contract Act, 1872 equally subjects boilerplate terms to the last-shot
rule. In this respect, although the Indian law of contract facilitates some amount of
certainty and predictability wherein the parties are well aware of the parameters
within which they must negotiate their terms,102 it often hinders the conclusion of a
contract when the acceptance does not perfectly match the offer in all respects. Even

98
cf discussion on the knock-out rule adopted under the French and German substantive law of
contract.
99
See, art 2.1.11(1) of the UPICC, discussed above. Also see Official Comment 1 to the concerned art
100
See, the Supreme Court’s verdict in Fair Air Engineers Corporation Ltd v NK Modi, AIR 1997 SC
533, supra. cf the English approach discussed above, which on the contrary does not permit any such
flexibility.
101
art 2.1.11(2) of the UPICC read along with Official Comment 2 to the concerned art. Also see,
Stemp (n 24), 265 footnote 90. cf art 19 (1) and (2) of the CISG, which stipulates the same rule as the
UPICC. However, art 19 (3) of the CISG attempts to include almost all alterations as ‘material’.
102
See, Gregory M Travalio, ‘Clearing the Air After the Battle: Reconciling Fairness and Efficiency in
a Formal Approach to UCC Section 2-207’ [1983] 33 Case Western Reserve Law Review 327, 364;
and Rühl (n 7) 212.
in circumstances wherein the individual clauses of the offer and the acceptance
happen to coincide with one another, the terms of the party who manages to fire the
last shot, would dictate the entire transaction – including the standard terms of that
party. The Indian substantive law of contract consequently fails to foster the
conclusion of the contract on mutually agreed terms and conditions in the context of
standard terms,103 which are less likely to be read by the parties.104 Thus, while the
UPICC acknowledges that the parties do not frequently peruse the contents of the
other parties’ standard terms, the Indian position, on the contrary, presumes that the
parties are ‘well versed’ and thus more familiar with the contents of the standard
terms.105 The UPICC’s modern approach to the battle of forms could plausibly cure
this defect in the Indian substantive law of contract.
Furthermore, Article 2.1.19 of the UPICC does not bind any party to the standard
terms proposed by the other, which have been incorporated by reference into the
contract, unless they have been accepted by the former.106 Apropos, for such party’s
standard terms to control the transaction, it must prove that the other party either
knew or ought to have been aware of the former’s intention to exclusively conclude
the contract by its standard terms.107 As seen in the above discussion, the Apex Court
in India, has, on the contrary, upheld the validity of such standard terms, which have
been impliedly incorporated into the main contract, by asserting that the parties are
not mandated to make any special reference to them.108 The Indian judiciary should
thus employ the UPICC’s recommendation for interpretational purposes to cure such
anomalies, considering the absence of any express indication to this effect in sections
7 and 8 of the Indian Contract Act, 1872.109
Likewise, even in situations wherein both the parties have exchanged their
standard terms, Article 2.1.22 of the UPICC suggests the application of the knock-out
103
cf Robert Cooter & Thomas Ulen, Law and Economics (6th edn, Addison Wesley 2016) 93-94;
Richard A Posner, Economic Analysis of Law (5th ed Aspen Publishers 1998), 108; and Rühl (n 7)
210-211, which states that the resolution of the battle of forms problem with the help of the last-shot
rule prevents the conclusion of the contract on mutually understood agreements even where parties
have agreed on some – but not all the terms.
104
See, Travalio (n 102), 355 and Rühl (n 7), 214-215 for the plausible reasons that prevent parties
from reading the other party’s standard terms.
105
See, M R Engineers & Contractors Pvt Ltd v Som Datt Builders Ltd, [2009] SCC 696.
106
See, art 2.1.19 of the UPICC discussed above, read along with Official Comment 3 to the concerned
art.
107
ibid. Also see, illustration 2 to the concerned art.
108
See, M R Engineers & Contractors Pvt Ltd v Som Datt Builders Ltd, [2009] SCC 696. Also see,
Chloro Controls (I) P Ltd v Severn Trent Purification Inc, [2013] 1 SCC 641; and Virtual Studio Pvt
Ltd. v TMT Investment Pte Ltd, [2014] SCC Del 7002.
109
cf para 6 of the Preamble to the UPICC, read along with Official Comment 6 to the concerned art.
rule so that merely those clauses, which are common in substance would apply when
the parties have agreed upon all other material/essential terms of the contract.110 Thus,
for instance, if both the parties stipulate different standard terms as regards their
arbitration agreement, the UPICC suggests the knocking-out of these clauses and
instead deciding the dispute by litigation. 111 The adoption of this approach would
eliminate the unreasonableness presently prevalent under the Indian law, wherein one
party is deemed to have impliedly accepted the standard terms of the other party in
total, merely because it assented to the essential terms of the latter’s offer. The
resolution of the battle of forms in standard term contracts under the Indian Contract
Act, 1872 with the aid of the UPICC would thus encourage the conclusion of the
contract on mutually accepted terms,112 while continuing to be flexible insofar as it
permits one party to inform the other party without undue delay that it does not desire
to be bound by the other party’s standard terms, in which case, the last-shot rule
would apply.113

2 The Battle of Forms under Indian Private International Law


In transnational contracts, the battle of forms issue often reaches a new dynamic
wherein the standard terms of one or both the parties additionally include conflicting
clauses as regards their choice of law and/or jurisdiction. Remedies, if any, to such
predicaments must be addressed according to the private international law of the
forum, which is deciding the concerned dispute. The term ‘private international law’
thus refers to the national law that would resolve the multi-state disputes of the
parties, provided they are private persons ‘other than a state in the exercise of
governmental authority’.114 Consequently, when the parties have included any choice
of law and/or jurisdiction clauses in their standard terms, the foremost duty of the

110
See, Official Comments 1-3 to art. 2.1.22 of the UPICC.
111
But see, illustrations 2 and 3 to art 2.1.11 of the UPICC. cf Viscasillas, (n 50), 120, which opines
that the strict application of the knock-out rule and the substitution of an arbitration clause with
litigation before courts could substantially undermine the intention of parties.
112
cf, Cooter and Ulen (n 103), 93-94; Posner (n 103) 108; and Rühl (n 7) 210-211, which opine that
the last-shot rule lacks this advantage.
113
Art 2.1.22 of the UPICC, read along with Official Comment 3 to the concerned art. Also see,
illustration 3 to the concerned art.
114
See, Symeon C Symeonides, Choice of Law (1st edn, OUP 2016) 2.
forum would be to analyse whether such choice(s) are even permissible under its
private international law.115
In the Indian context, in the absence of any codification of the rules of private
international law, its judiciary relies upon the traditional common law principles
espoused via case-law, which are of persuasive value. Consequently, although the
United Kingdom is now a signatory to the Rome I Regulation on the Law Applicable
to Contractual Obligations, 2008 (Rome I),116 its earlier decisions on a given subject
continue to influence the development of private international law in India, which is a
common law jurisdiction. That being said, there are minimal restrictions in India on
the parties’ autonomy regarding their choice of governing law and/or the forum that
would decide their disputes arising from their international commercial agreements.
As regards party autonomy in the choice of law, the Supreme Court of India has, in
National Thermal Power Corporation v Singer Company, 117 affirmed the parties’
right to choose, expressly or implicitly,118 any governing law – even if the choice has
no connection to their transaction. 119 The court per Thommen and Agrawal JJ.
referred to the principles of the English private international law as stipulated in Vita
Food Products v Unus Shipping Company120 to clarify that the only restriction on the
parties’ right to choose their law is when it is not ‘bona fide and is opposed to public
policy’.121 In other words, the choice of any governing law would be valid unless it
contradicts the overriding mandatory rules or the public policy (ordre public) of

115
See, Graziano (n 23), 80-81, discussing the prerequisites for ascertaining a solution on the battle of
forms vis-à-vis a choice of law clause in the standard terms.
116
See, Commission Decision of 22 December 2008 on the request from the United Kingdom to accept
Regulation (EC) No 593/2008 of the European Parliament and the Council on the law applicable to
contractual obligations (Rome I) (notified under document number C(2008) 8554)
<www.eurodocs.org/081637> accessed 19 September 2017.
117
[1992] 3 SCC 551.
118
ibid para 15, which states that the implied intention of the parties will be discerned according to the
‘sound ideas of business convenience and sense to the language of the contract itself’.
119
[1992] 3 SCC 551 para 14, referring to A Dicey, J Morris, & L Collins (eds), Dicey and Morris on
the Conflict of Laws (11th edn, Sweet and Maxwell 1987), Rule 180: Sub-Rule (1), which defines ‘the
proper law of the contract’.
120
[1939] AC 277.
121
[1992] 3 SCC 551, para 15, referring to the remarks of Lord Wright, in Vita Food. Also see, the
decision of the Apex Court in Modi Entertainment Network and Another v W.S.G Cricket PTE. Ltd,
[2003] 4 SCC 341; and the verdict of the High Court in Rhodia Ltd and Others v Neon Laboratories
Ltd, AIR 2002 Bom 502; White Industries Australia Ltd v Coal India Ltd, [2004] 2 Cal LJ 197; Swatch
Ltd. v Priya Exhibitors Pvt. Ltd; (101) DRJ 99; Shree Precoated Steels Ltd. v Macsteel International
Far East Ltd & Anr, [2008] 2 Bom CR 681; and Max India Ltd. v General Binding Corporation, 2009
(112) DRJ 611 (DB). cf earlier verdicts of the Supreme Court in Delhi Cloth and General Mills Co.
Ltd. v Harnam Singh and Others, AIR 1955 SC 590; and British India Steam Navigation Co. Ltd. v
Shanmughavilas Cashew Industries, [1990] 3 SCC 481, which upheld party autonomy in India to the
extent that the choice of law had some connection with the transaction in question.
India.122 In the absence of any express or implied indication as regards the governing
law, the Indian private international law empowers the presiding court to impute an
intention by referring to the law, which has the ‘closest and most real connection’
with the contract. Apropos, the Apex Court, in the National Thermal Power
Corporation further clarified that the objective connecting factors in the absence of
choice would either be – the lex loci contractus, the lex loci solutionis, the lex loci
domicilii or the law of the country of the court having jurisdiction. 123 In other words,
the courts are empowered, in the absence of choice, to rely on any one of these factors
to determine the law that has the closest and most real connection with the
transaction.
Towards this end, while party autonomy in the choice of law is respected under
Indian private international law, any dispute as regards the consent of one party to the
choice of that governing law indicated in the standard terms of the other party, would
be resolved via the putative proper law: that is the law which is supposedly chosen.124
Reference to the putative proper law would however not be feasible in circumstances
wherein both these parties have included contradictory governing laws in their
respective standard terms. 125 In the absence of any established common law
principle126 or Indian court verdict on the matter, it remains nebulous whether the
Indian judiciary would invoke the lex fori and apply the last-shot rule – in line with
the approach followed at the substantive law level;127 or whether it would negate such

122
[1992] 3 SCC 551, para 28. Also see, Taprogge Gesellschaft MBH v IAEC India Ltd, AIR 1988
Bom 157; and Kumarina Investment Ltd. v Digital Media Convergence Ltd & Anr, 2010 TDSAT 73,
which clarifies the public policy of India in the context of transnational commercial agreements.
123
[1992] 3 SCC 551, para 16-17, relying on the common law verdict of Whitworth Street Estates
(Manchester) Ltd. v James Miller & Partners Ltd, [1970] AC 583.
124
See, Brijraj Marwari v Anant Prasad, AIR 1942 Cal 509; and KB Agarwal & Vandana Singh,
Private International Law in India (Kluwer 2010) 97-98. Also see, Gerhard Dannemann, ‘The Battle of
Forms and the Conflict of Laws’ in Francis D Rose (ed) LLP Lex Mercatoria: Essays on International
Commercial Law in Honour of Francis Reynolds (LLP 2000) 199, 207, which states that ‘the validity
and the effectiveness of a choice of law clause combines substantive contract law with particular
conflict of law aspects.’
125
See, Graziano (n 23) 81-82.
126
See, OTM Ltd v Hydranautics [1981] 2 Lloyd’s Rep 211, in which, only one party’s (the buyer’s
standard terms incorporated a choice of law clause; Dannemann (n 124) 207 et seq; and Graziano (n
23) 82. cf Rome I Regulation, to which, the United Kingdom is a signatory, which also does not
provide any plausible solution to the problem.
127
Micheal Bridge, James Fawcett and Jonathan Harris, The International Sale of Goods in the Conflict
of Laws (1st ed OUP 2005), paras 13.60-13.61, which suggests that the lex fori should be invoked in
such circumstances. Also see, Graziano (n 23) 82, which discusses lex fori as a plausible solution
according to a minority opinion in the UK.
opposing choices altogether and instead directly rely on the objective connecting
factors to determine the governing law.128
In a related vein, the Apex Court of India, in Modi Entertainment Network and
Another v. W.S.G. Cricket PTE Ltd,129 further upheld party autonomy in the choice of
jurisdiction. In casu, the court per Syed Shah Mohammed Quadri & Arijit Pasayat JJ.
affirmed that if the parties had concluded a transnational agreement containing a
choice of jurisdiction clause, the same would be enforced in India unless there are
‘good and sufficient reasons’ to disregard this choice.130 Apropos, the Indian court
would disregard the parties’ choice of forum when i) it involves the interest of other
(i.e. third) parties, or ii) it imposes a risk of parallel proceedings and inconsistent
judgments, or iii) the essence of the jurisdiction of the chosen court does not exist, or
iv) because of a vis major or force majeure or the like’.131 In such circumstances, the
private international law of India mandates the determination of the jurisdiction either
via the lex loci contractus, lex loci solutionis or the place of payment.132
Towards this end, while the jurisdiction clause would otherwise be final and
binding from the moment the parties have concluded a written agreement to that
effect, there is no clarity on the solution adopted under Indian private international
law to resolve the battle of forms problem when both the parties have included
contradictory choice of court clauses in their standard terms. It is ambiguous whether
the Indian judiciary would adopt the last-shot rule, or whether it would disregard both
the conflicting clauses via the knock-out rule and instead determine the jurisdiction
according to the principles of its own private international law.

2.1 Plausible uses of the Hague Principles to Resolve the Predicaments of the
Battle of Forms under Indian Private International Law
At present, the Indian private international law is a conundrum as to the manner in
which the battle of forms must be resolved when the parties have included conflicting
standard terms on their choices of law and jurisdiction in their transnational

128
cf, L Collins (ed), ‘Dicey, Morris and Collins on the Conflict of Laws: Vol 2’ (15th ed Sweet &
Maxwell 2012) para 32 et seq, which suggests this mechanism as a plausible solution for the English
courts. Also see, Graziano (n 23) 83, and Dannemann (n 124) 207 et seq, which discusses this method
as a proposal for a plausible solution.
129
[2003] 4 SCC 341.
130
[2003] 4 SCC 341, para 27.
131
ibid.
132
See, sec 20(c) of the Code of Civil Procedure, 1908.
agreement. Moreover, no international convention or soft law has, till date been able
to address a plausible solution for the battle of forms vis-à-vis choice of court
agreements. In any case, it appears that the knock-out rule could be the most feasible
solution to such a predicament as it would ‘weed out questionable choices’ on
jurisdiction.133
The Hague Principles, however, offer a rather novel resolution to the battle of
forms when it comes to conflicting choice of law clauses incorporated in the parties’
standard terms, which should be employed as a gap-filler in Indian private
international law. In this regards, the Hague Principles are comparable to the UPICC
insofar as they are both in the form of soft law and endeavour to be used inter alia, by
legislators and the judiciary to interpret, develop or supplement the national law.
The above discussion highlights the uncertainty that prevails in the Indian private
international law. There is no clarity as to whether the Indian courts would invoke the
last-shot approach via the lex fori in such circumstances, or instead altogether
disregard both the parties’ choices and discern the applicable law via the objective
connecting factors – as stipulated in the National Thermal Power verdict. The
advantage of the Hague Principles’ suggested approach is that it avoids the application
of the lex fori, which would not only lead to uncertainty as regards the law that would
eventually apply, but will also result in forum-shopping.134 Likewise, the suggested
approach in Article 6(1)(b) of the Hague Principles also avoids the direct application
of the objective connecting factors unless the chosen laws prescribe entirely divergent
mechanisms to resolve the battle of forms. Instead, it attempts to reconcile the parties’
choices in as far as possible.135 In any case, the Indian private international law seems
to be in a state of flux as regards the law that will apply to a given contractual
obligation via the objective connecting factors – whether it will be the lex loci
contractus, the lex loci solutionis, the lex loci domicilii or the law the forum.136 Thus,
while the Apex Court provided some clarity on the objective connecting factors to
determine the closest and most real connection in the absence of the parties’ choice, it
remained silent as regards the classification of their application. Reliance on Article

133
Dannemann (n 124) 218.
134
Graziano (n 23) 82-83, 93.
135
See, art 6(1)(b) of the Hague Principles, which states: ‘… if under both these laws, the same
standard terms prevail, the law designated in the prevailing terms applies…’; and Graziano (n 23) 93.
136
See, the verdict of the Supreme Court in National Thermal Power Corporation v Singer Company,
[1992] 3 SCC 551 para 16-17. cf Art 4 of Rome I, which clearly states the law that would be applicable
in the absence of choice depending on the contractual obligation.
6(1)(b) of the Hague Principles to resolve the battle of forms will therefore minimise
the circumstances in which, the Indian courts would be called upon to determine the
proper law via the objective connecting factors.

D CONCLUDING REMARKS
At present, the Indian Contract Act, 1872 adopts the mirror-image approach, which is
complemented with the last-shot rule. Thus, if one party has assented to the material
terms of the contract as espoused in the other party's offer, it will be presumed that the
former has also implicitly accepted in entirety, the standard terms of the latter – even
if it were unaware of the same. The strict application of these traditional rules on
‘offer, acceptance and counter-offer’ by the Indian courts to resolve the predicament
of the battle of forms in domestic disputes, has resulted in unreasonableness and has
promoted the conclusion of contracts in bad faith.137 At the same time, the Indian
private international law lacks any appropriate solution to address issues pertaining to
the battle of forms in transnational contracts in the absence of any black letter rule or
court verdict on the subject. The present author, therefore, suggests that the
recommendations outlined in the UPICC and the Hague Principles should be
employed as gap-fillers to interpret, supplement and develop the Indian law vis-à-vis
the battle of forms.
As regards the UPICC, although it is in the form of soft law, it imbibes the
modern approach – whereby it distinguishes solutions on the battle of forms
depending on the place where the conflict has arisen. The UPICC thus incorporates
the common law's last-shot rule as a solution for battles between the essential terms of
the contract but further stipulates the civil law's knock-out approach for conflicts
between contradictory standard terms that are mechanically exchanged among both
the parties. The UPICC, unlike the Indian law of contract, further prevents the
arbitrary application of one party’s standard terms unless that party has expressly
made its intention known to the other party that it would exclusively contract on its
own terms.138
In a related vein, the Indian judiciary should also employ the Hague Principles to
resolve anomalies that may arise in future considering the ambiguity presently
prevailing in the country’s private international law vis-à-vis its approach towards

137
See, Viscasillas (n 50) 117.
138
See, illustration 3 to art 2.1.19 and art 2.1.22 of the UPICC.
standard terms containing conflicting choice of law clauses. In particular, the Hague
Principles upholds the principle of party autonomy to the fullest extent possible
insofar as it merely disregards the parties’ choices when the laws designated under
both the parties’ standard terms differ. Adoption of the battle of forms solution under
the Hague Principles would thus sustain the respect for party autonomy in the choice
of law under Indian private international law. The prescribed solution under the
Hague Principles completely eliminates chances for the Indian courts to arbitrarily
apply the last-shot rule by invoking the lex fori; or even directly resorting to objective
connecting factors – without as such analyzing if the law under both the parties’
standard terms is indeed different or not.