Commercial Norms and the Fine Art of the Small Con: Comments on Daniel Keating’s ‘Exploring the Battle of the Forms in Action’

The standard battle-of-the-forms story, often rehearsed in the classroom, is one in which merchants try to take advantage of their contracting opposites. A seller wants to escape the obligations that come with implied terms and seeks to disclaim them in its acknowledgment form. Its buyers do not realize they have been had until after the goods fail. Only then do they read the seller’s form and discover that they are without remedy. Conspicuously absent in Dan Keating’s fine article, however, is any evidence that supports this story. Some of his merchants talk about putting favorable terms in their forms, but only as a way of counteracting the effect of another form. Nothing suggests a Darwinian struggle in which each seeks to take advantage of another. There are several explanations. It is possible that the battle goes on, but Keating failed to find it. The large corporations in his sample are unlikely to be victims of forms and are unlikely to have general counsel that admit to using forms to their benefit. Alternatively, evidence may be missing because existing law does its job, more or less. When both parties are even modestly sophisticated, most courts employ some version of a knockout rule. And, by the time the dust settles, we end up with the Code’s default rules. Under section 2-207, courts do not take what forms say seriously. If courts do not take forms seriously, we should not expect the parties to either. If, however, we create a regime in which we allow parties to opt out of default rules easily, the battle may become important.