Following a very good question at our scrum…
It can be very confusing to understand legal language, including the meaning and difference between:
• Contract
• Agreement
• Terms & Conditions (“ts&cs”)
At the time of writing, it’s a nice sunny day and as we’re based by the beach, we’re going to use a beach analogy to try help explain these concepts!
1. You challenge your friends to a “match” down the beach – one team turns up with a volleyball and a net; the other turns up with a football and some goals. Clearly there is no meeting of minds, i.e. there is no agreement between the parties.
2. After a bit of a debate, you settle on football. You briefly discuss how many players on each team, how long you’ll play for etc. Now possibly we’ve got a meeting of minds – there’s a high level agreement between you both, plus a few rules.
3. You mark out the pitch in the sand, set up the goals and start playing… until someone picks up the ball! This might sound crazy nowadays, but prior to the 1860’s some rules still allowed the ball to be carried (and this is where rugby later became an offshoot of football!). Before then unified rules didn’t exist, with each team having their own rules – meaning you had to agree on the rule book beforehand. In our analogy you could say that the rule book is equal to the written terms of the Contract. As a side note, getting all teams to agree proved difficult – quite like a contract negotiation!
So to put this back into contract speak – a Contract requires agreement of both parties as to the terms of the arrangement. However there is generally no specific form that this must take so the terms of the arrangement could be set out in:-
• writing – which could be a formal document* or simply the chain of emails between the parties
• verbally
• implied by law.
* Confusingly where there is a formal document, sometimes this is called “Contract” and other times “Agreement”! However, that is a small detail as what is important is that both parties agree.
Standard ts&cs are usually generic documents which set out the terms and are intended to be used by a party repeatedly in connection with similar transactions by the business e.g. the sale of similar goods or services.
So maybe in paragraph 2 above, there wasn’t a meeting of minds after all, as each team thought their own rules applied. In contract land, this is often referred to as the “battle of the forms” – where both the supplier and customer try to insist that the Contract is governed by their own standard ts&cs (which will be drafted in that party’s favour).
If you would like more information (on contracts, not football! (although Steve’s a football anorak!)) or to receive a copy of our factsheet on Battle of the Forms, please drop us a line.