"Battle of the Forms" Conflicts in Competing Terms and Conditions in Marine Fuel Oil Contracts

Oct 27, 2025
7 min read

Updated: Feb 18

Introduction

This Article will address those situations where, during the course of stem negotiations for the

sale and purchase of marine fuel oil (“bunkers”), both the seller and buyer interject their own contract

language (form or otherwise) into the negotiations and some or all of the interjected language conflicts.

Whose contract terms and conditions govern a dispute involving those conflicts? The answer to that

question will be discussed, ranging from what law controls after a dispute is submitted to a U.S. court

and thereafter, how a U.S. court would likely resolve the conflict.

Noted initially are common examples of conflicts in bunker contract terms and conditions are:

1. differing choice of law provisions and forum/jurisdiction selection clauses;

2. differing time periods for notification of bunker quality issues, which may lead to

waived or time barred quality claims; and

3. differing provisions for sampling and testing for quality problems, which may lead to a

final and binding effect of the test results as to the buyer.

Where such conflicts arise, which party wins the “battle of the forms?”

Fundamental Issue – What Law Applies?

Faced with this type of conflicting contract language, a U.S. court would initially determine the

fundamental issue of what law applies. This, in turn, involves a two-step analysis.

First, a determination would be made as to what nations’ law governs the formation of the

bunker contract. The mechanism for that determination is the choice of law analysis set forth in the

Supreme Court’s decision in Lauritzen v. Larsen, 345 U.S. 571 (1953) and its progeny. Lauritzen provides

a seven-factor analysis for maritime choice of law questions: (a) the place of the wrongful act; (b) the

law of the flag; (c) the allegiance of the injured party; (d) the allegiance of the defendant shipowner; (e)

the place of contract; (f) the inaccessibility of a foreign forum; and (g) the law of the forum. Id. at 345

U.S. at 583-92.

Second, after the law governing contract formation is determined, a U.S. court would decide

what law applies to the legal issue(s) raised by the conflicting terms and conditions. If, for example, the

court determines that U.S. law applies to contract formation, it would look to U.S. law to determine

which party’s contract terms apply as part of the bunker contract. On the other hand, if the U.S. court

determines that a foreign nation’s law governs contract formation, it would then determine whose

terms and conditions govern under that foreign law.

As is common place, a seller’s and buyer’s terms and conditions contain choice of law provisions

which are conflicting. How do these conflicting choice of law provisions play into the second step

determination? This point was effectively (but not directly) addressed in Trans-Tec Asia v. M/V

HARMONY CONTAINER, 518 F.3d 1120 (9th Circuit Court of Appeals 2008), which involved the sale and

purchase of bunkers. Under step one, the Lauritzen analysis, the Court found that Malaysian law was

the law of contract formation based essentially on the fact that the vessel was Malaysian flag and vessel

owners’ Malaysian nationality. Under step two, the Court found that under Malaysian law (which relies

heavily on English law), the U.S. choice of law provision in seller’s terms and conditions was a term of

the contract. And under U.S. law, the Court found that a maritime lien existed against the vessel as a

result of being supplied with bunkers.

While the Trans-Tec decision did not involve conflicting choice of law provisions, we believe the

analysis under the second step would be the same if there were conflicting provisions. That is, with the

court having established the law of contract formation under step one, step two would require the court

to determine which party’s terms and conditions governed, which in turn would decide whose choice of

law provision applies.

“Battle of the Forms” under U.S. Law

For present discussion, we will assume U.S. law applies to contract formation under step one

and U.S. law also applies to the merits under step two. Thus, we are left with the issue of how will a U.S.

court determine which of the two sets of conflicting contract terms and conditions govern.

U.S. maritime law applies to issues arising out of bunker contracts (i.e., the bunker stem and

supply of bunkers to the vessel). Generally speaking, U.S. maritime law looks to the intent of the parties

in order to interpret a contract. By the same token, however, a U.S. court faced with determining the

intent of the parties will frequently draw from state law, such as the Uniform Commercial Code (“UCC”),

for more specific guidance on commercial issues (such as those arising out of the sale of goods) that are

directly addressed in the UCC. See, for example, Interpool Ltd. v. Char Yigh Marine (Panama) S.A., 890

F.2d 1453, 1459 (9th Circuit Court of Appeals 1989) (the UCC is indicative of the federal common law in

admiralty cases), amended, 918 F.2d 1476 (9th Circuit Court of Appeals 1990).

In fact, the UCC (which has been adopted in 49 of the 50 states in the U.S.) does provide

guidance in these circumstances in Article 2 of the UCC – governing the sale of goods.

Specifically, the main UCC guidelines for determination of “battle of the forms” issues are found

in § 2-207 – “Additional Terms in Acceptance or Confirmation.” Notably, they are grounded in the

fundamentals of contract law, i.e., those principles involving an “offer” and “acceptance” of an offer.

Section 2-207 provides in full:

(1) A definite and seasonable expression of acceptance or a written confirmation which

is sent within a reasonable time operates as an acceptance even though it states terms

additional to or different from those offered or agreed upon, unless acceptance is

expressly made conditional on assent to the additional or different terms.

(2) The additional terms are to be construed as proposals for addition to the contract.

Between merchants (e.g., the seller and buyer of bunkers) such terms become part of the

contract unless:

(a) the offer expressly limits acceptance to the terms of the offer;

(b) they materially alter it; or

reasonable time after notice of them is received.

(3) Conduct by both parties which recognizes the existence of a contract is sufficient to

establish a contract for sale although the writings of the parties do not otherwise

establish a contract. In such case the terms of the particular contract consist of those

terms on which the writings of the parties agree, together with any supplementary terms

incorporated under any other provisions of this Act.

As a practical matter, the UCC § 2-207 guidelines can manifest themselves in any number of

ways. The following points lay out how a U.S. court could run its analysis of whose terms and conditions

govern.

1. Is the buyer’s bunker order an “offer?”

2. If so, does the buyer’s bunker order “expressly limit acceptance to the terms of the offer?” (§

2-207(2)(a)).

3. Does the seller’s response act as an “acceptance” which is “expressly made conditional on

assent to the additional or different terms?” (§ 2-207(1)).

4. Does the seller’s response, which accepts some main terms but adds others that are

additional or different such as seller’s terms and conditions, become part of the contract? Between

commercial parties (“merchants”), they do become part of the contract unless (a) the offer expressly

limits its acceptance to the terms of the offer, (b) the additional or different terms “materially alter” the

contract,” or (c) notification of objection by the buyer has been given or is given within a reasonable

time. (§ 2-207(2)(a)-(c)).

5. Do the seller’s terms and conditions “materially alter” the contract? (§ 2-207(2)(b))? Official

Comment No. 4 to § 2-207 speaks in terms of material alteration existing when it “result[s] in surprise or

hardship if incorporated without express awareness by the other party.” Comment No. 4 identifies a

number of situations where a contract is materially altered, including a clause requiring that a complaint

about the goods be made in “time materially shorter than customary or reasonable.” One factor that

would be considered is whether the seller and buyer have stemmed bunkers on prior occasions and, if

so, whose terms and conditions were used, and if any issues arose and were resolved.

6. Situations where material alteration of the terms has not been found include a clause fixing a

reasonable time for complaint about the goods being within customary limits and specifications or in the

case of a purchase for sub-sale, a clause providing for inspection by the sub-purchaser. § 2-207, Official

Comment No. 5.

7. Notification within a reasonable time of a party’s objection to additional terms that have been

added by the opposing party will also prevent acceptance of these additional terms. § 2-207(2)(c).

Official Comment No. 6 posits the situation where clauses on confirming forms sent by both parties

conflict, each party must be assumed to object to the other party’s conflicting clause. Such a situation is

sufficient to meet the notice of objection requirement in this sub-section.

8. The default position regarding the battle of the forms is contained in § 2-207(3). In

circumstances where the writings of the parties do not otherwise establish a contract, the conduct of

the parties that recognizes the existence of a contract is sufficient to establish a contract. In that event,

the terms of the contract are “those terms on which the writings of the parties agree” plus

“supplementary” terms incorporated under any other provisions of the UCC. Official Comment No. 7.

(Some contracts specifically write out § 2-207(3) (or attempt to) because of the “knock-out” effect of

this default provision.)

Thank you for reading this Article. While each dispute must necessarily rise or fall on the

specific facts involved, I hope the discussion here has provided useful guidance on what evidence a U.S.

court would consider, how that evidence would play out, and which party may prevail in a battle of the

forms under U.S. law.

If you have any questions or comments about the Article, please do not hesitate to contact Kirk

Lyons at klyons@lyons-lawoffices.com.

Introduction

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