First Semester: Battle of the Forms--UCC 2-207

Minneapolis & St. Louis Railway Co. v. Columbus Rolling-Miss Co.

Info on rationale of rejecting "last shot rule":

It would be unfair to bind the buyer of goods to the std terms of the seller just b/c he was the one to send the last form, when neither party cared sufficiently to establish expressly the terms of their agreement
Seller pretty much got to dictate the K

"Battle of the Forms"

Because each party strives to make a K on the terms of its own form, a mismatch of terms is likely, raising questions about whether a K has been formed and if so, on what terms.

Battle of the forms is intensified when each party uses standardized forms to express offers & acceptances.

However, it can also arise when parties use individualized messages

Under Common Law, (Mirror Image rule) std K law principles required that the offeree's acceptance be the precise terms of the offer (mirror image rule) & any variance therefrom, material or not, was a rejection of the orig offer & fxed as a counteroffer.

Then the counteroffer could be rejected or acceptance to the orig offeror-- who now has the power to accept/reject

Used the "last shot rule" the last terms sent via form were the terms of the offer.

The UCC changed all that.

NOW---

Acceptance:

It dropped the mirror image (see above) rule in an effort to be more attentive to typical commercial relationships & practices-- the passing of inconsistent boilerplates b/n parties that intended to be in the K relationship, but maybe not the exact terms.

"An expression of acceptance may operate as an acceptance even though it states terms additional to or different from those offered & agreed upon."

Not all responses to an offer operate as acceptances.

Expressions of acceptances must be:

Definite
Seasonable
Sent w/n a reasonable amt of time
Sufficiently responsive to the offer to indicate the intent to enter into a K

*An acceptance may stunt its own ability to fx as an acceptance if it is expressly made conditional on assent to the additional or different terms.

Timeline for acceptance of K & creation of terms:

2-207 allows that K formation & K terms be figured out at different times (previously, it was req that they be determined at the exact same moment, hence the "last shot rule")

The challenge is to figure out what the terms are when the terms set forth by the parties diverge
- Further, 2-207 "contemplates" that the terms of K as initially constituted may change over time.
  - For instance, there's always a possibility that an additional term will enter the K later when the receiving party gets notice of the add'l term but fails to object after a reasonable amount of time has elapsed.
  - In cases where the offeree's response contains terms which are actually inconsistent w/ those in the original offer, the cts look at the parties' conduct to determine whether they acted as though a K had been formed.
    - If so, the K consists of those terms on which the writings agree;
    - If the terms conflict, the terms that conflict cancel each other out & necessary terms are provided by the U.C. C. or by custom

Method of K'ing:

Under 2-207, Ks can be found in either writing or in conduct of the parties.

Conduct K= the terms to which both parties have agreed + UCC's provided default terms (aka "gap fillers")

UCC's "gap fillers" include warranties, both implied & expressed if the seller fails to expressly disclaim them. These rules effectively "fill in the blank" on warranties.

Silence as Consent:

Silence will serve as consent as long as the new term does not affect the materiality of an agreement. If it does materially alter the agreement, the party who proposed it must present add'l evidence, beyond the term itself, to show that he was reasonable to infer the consent of the other party to the new term from the other party's silence. Usually, this is evidence of prior dealings.

The fact that particular terms, like arbitration clauses, are in widespread use across certain industries, like fabrics and textiles, sometimes contributes to the conclusion that the terms were assented to.

On the other hand, however, terms found in boilerplates are not considered part of the deal unless specifically mentioned or unless the boiler plate's terms coincidentally reflect some aspect of cuttom, usage, course of dealing that shows that that term was understood as implicit in the resulting contractual relationship.

Different courts holds different things. In NY, an arbitration term is a material change. (Therefore, it must be expressly assented to in order to become part of the K)

Info on the rationale of 2-207:

Provides a default rule: the parties intended to the terms to which both parties agreed

Makes a K possible in most circumstances when the terms don't match exactly….

Most parties does not expect a dispute to arise when they first enter a k & as a result, they usually proceed w/ the K despite knowing their individual terms DO NOT conform (or can be "enforced")

"Boiler plate" provisions are largely ignored by the operating personnel (salesmen & purchasing agents)-- as long as the terms of the sale conform (qty, time, shipping, etc.) generally the forms are filed away in some drawer. At this point, it is likely that both the buyer & the seller have assumed they have made a K.

Sometimes these forms have the boilerplate but lack the necessity of it-- forms are used for their accounting/tracking purposes and less for the actual legal protection/K formation aspects

Key questions:

What conduct or language makes the conduct by the offeree "expressly conditional"
What constitutes assent by the offeror

Conditional acceptance: an acceptance that includes a term or condition which was not part of the original offer & therefore considered to be a "qualified" acceptance & thus an implicit rejection of the offer.
- This can happen under 2-207 as well as old Comm Law system. 2-207 (1) "unless made conditional" then same routine as old Comm Law kicks in (orig offeror then has to accept)
- However, see the grid on the mitigations of the mirror image rule… Sometimes, conditions are considered implicit in the offer. Or if the offeree had a legal right to insist upon the condition under the terms of the offer, the acceptnace will be considered an "unqualified" acceptance. For example, X accepts Y's offer to sell land but includes a condition that Y give X good title….

UCC 2-207 "Cheat Sheet" This thing is so tricky to understand + prone to disputes, a sheet outlining significant problems to consider is a nice tool:
- The acknowledgment contains a disclaimer of warranties that the purchase order does not
- The acknowledgment contains an arbitration clause that the PO does not
- The acknowledgment imposes a requirement that any claims be made w/n one month of the date of delivery

Minneapolis & St. Louis Railway Co. v. Columbus Rolling-Miss Co. (1886)
[pre UCC case. This case was decided under trad'l common law principles.]

An order diverging from the expressed terms of the offer--here the D quoted a price per ton for a qty b/n 2K and 5K, P ordered a mere 1200-- was held to be a conditional acceptance. Conditional acceptances are thus a rejection of the original offer unless the party who made the original offer assents to these modifications or renews the original offer.

The party who rejected the original offer cannot later revive it by tendering an acceptance of it.

Parties:

P =Minn.

D=Columbus

Facts:

-P sent 12/5 note: pls quote me prices for 500-3K tons 50 lb rails AND for 2K-5K iron rails., March delivery

-D responded 2 days later that this qty would not be accepted

… see p. 189

PH:

P sues for specific performance

Issue on appeal:

Did a K form here? Is an order that specifies a qty not covered bythe offer a conditional acceptance & thus a rejection?

Conclusion:

-Affirmance for D. There was no K b/n them.

How many offers in Minneapolis?

Dec. 5 letter from P: This a request for a quotation

Dec. 8 from D: An offer! "If our offer is accepted."

Dec. 16 from P ("Please enter an order for 1200 as per your letter of the 8th. Pls forward written K."): This is an acceptance [in P's eyes only/ acourding to the court, this is a counteroffer which is pretty much a rejectiono f the orig offer from the mill]

Dec. 18 from D: Rejection of the counter-offer

Dec. 19: We were just kidding. Please enter an order for 2k rails as per the 12/8 letter by P: An offer on the original offer by the mill

Now, there's another counter-offer by the P but was never accepted.

Why??

2-207 cont.

Step-Saver Data Systems v. Wyse Techn.

U.C.C. Sect. 2-207 Additional Terms in Acceptance or Confirmation

(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 -- (This creates a counteroffer & NOT an acceptance)

(2) The additional terms are to be construed as proposals for addition to the contract. Between merchants such terms become part of the contract unless: (These are Or-- one will do)

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

(b) they materially alter it; or

(c) notification of objection to them has already been given or is given within a reasonable time after notice of them is received. (When this happens, those add'l terms DO NOT become part of the agreement)

(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.

This comes in to play w/ counteroffers & add'l terms.

Saturday, October 11, 2008

7:24 PM

2-207

Additional Terms in Acceptance or Confirmation

Examples of forms used by the parties:

Sellers:	Quotations; sales acknowledgments
Buyers:	POs

The UCC holds that two parties recognize a K even if the terms on their respective forms "clash" UNLESS the responding party, the seller,

Materiality & the element of unreasonable surprise….

To become an acceptance under 2-207(1), the amount of material alteration matters.

If the terms do NOT materially alter the terms they will be incorporated unless notice of objection has been given or is given w/n a reasonable amt of time.

If the terms DO alter the offer, then they are not construed as proposals (& will not be absorbed after a reasonable amt of time)

Key point= Surprise or hardship on one party resulting from the inclusion of materially-altering terms, including w/o the express awareness of that party

"An alteration is material if consent to it cannot be presumed (which is essentially the same thing as 'unreasonable surprise" surprising=expected; unsurprising=unexpected...

Hardship is a consequence, not a criterion; you cannot walk out on a K that you fairly deemed to have agreed to, merely b/c your performance turnss out to be a hardship for you.

Materiality is separate from consent.

If a new term does not effect a material alteration-->silence is consent

" DOES effect…-->The party who proposed it must present add'l evidence, beyond the term itself to show that it was reasonable for them to infer the other parties' consent to the new term from silence. Usually, prior dealings would suffice as such evidence.

Problem areas:

Arbitration agreements
Choice of law-->application of UCC variances b/n states (what is/is not material)
Choice of forum
Time for delivery
Time for payment

arbitration

n. a mini-trial, which may be for a lawsuit ready to go to trial, held in an attempt to avoid a court trial and conducted by a person or a panel of people who are not judges. The arbitration may be agreed to by the parties, may be required by a provision in a contract for settling disputes, or may be provided for under statute.

NOT A GAP FILLER.

Under 2-207:

Merchant 2 merchant: silence can form a valid acceptance

Mechant 2 non merchant: proposal-- silence is never an acceptance

International counterpart to 2-207:

Article 19 of the Convention on Ks for the International Sale of Goods

Broadens category of terms that "materially alter" Ks to include terms relating to the extent of one party's liability to the other or the settlement of disputes.

Step-Saver Data Systems, Inc. v. Wyse Technology

United States Court Appeals, 3rd Circuit, 1991.

Parties:

P=Step Saver, purchaser

D=Wyse, computer hardware seller

TSL, "The Software Link", seller of computer softaware which P packaged for its own consumers

Facts:

P has nearly 1 yr long history with D buying its software & reselling them (after repackaging them) to doctors and lawyers offices

Process of purchase- P would call D and place an order

D would accept the order and promise while on the phone, to ship the goods promptly

After the call, P would send out a P.O. detailing the items, price and shipping as well as payment terms

D would ship order promptly w. invoice

Goods would conform

No reference was ever made as to a disclaimer of warranty that was printed on the "box top" (now known as "shrink wrap licenses" license agreements on the software itself.

Customer, you have not purchased the software, only a licensing agreement…
Only warranty we're giving you is for defective disks inside this box
Opening this pkg indicates YOUR acceptance of terms & conditions. If you don't agree, send it back to us w/n 15 days & we'll refund your $$

P started selling the software in Nov. of 1986. Almost immediately, P began to receive complaints from its customers.

Parties tried to resolve the problems but P ended up bringing this action…

PH:

P sued for BOW (warranty)

T Ct found that the box-top license was enforceable by deciding issues of law related to K formation & interpretation.

P appeals

Appellate ct takes it as a de novo trial

Issue on Appeal:

This is not a dispute over the existence of a K. Instead, it's of the terms.

Was Step-Saver bound by the disclaimer of warranty provision printed on the box top license?

Three parts:

Does this fit under 2-207?
Application of 2-207 regarding the "overwriting" & assent to applicable warranties by terms printed on packaging
Terms of the K

P's argument:

-This box-top license was separate from agreed-upon terms + materially alters the K = & it does not become part of the K under 2-207

D's argument:

It's a conditional acceptance.

Two reasons why this is a conditional acceptance by TSL conditioned on P's assent:

The box-top license itself states that "opening this product…consent to terms"
The box-top license permits the return of the product if the purchaser does not consent to the terms
Even if these terms did NOT become a part of the condition (if it were just a single transaction), P's repeated purchases & D's repeated expression of these terms on the box-top eventually incorporates them into the K.

Rules:

2-207 scope & limits-- bar on adoption of "materially-altering" term. When the parties' conduct establishes a K, but the parties have failed to adopt expressly a particular writing as the terms of their agreement (when the terms do not agree,) the UCC steps in and determines what those terms were/are

Analysis:

i.-

The reasons why the last shot rule was rejected & 2-207 was adopted apply fully in this case…

Iii: While one court has held that terms repeated in a number of written confirmances eventually become a part of the K even if neither party ever takes any action w/ respect to the issue addressed by those terms, most cts have rejected such reasoning, we don't buy it.

-It was a unilateral act by D of repeatedly sending copies of the box-top license to P. It cannot est. a course of dealing w/ P.

ii.-

There is no specific evidence as to the parties' course of dealing or performance-- the parties have NOT incorporated the warranty disclaimer into their agreement in any way.

There is evidence that D tried to get P to expressly consent to the terms of the box-top & P refused.
When 1st notified of the problems w/ the program, P spent considerable time & $$ trying to fix the problems w/ the program that were identified by P
-Shows its own disregard for its disclaimer

This was not a conditional acceptance. The language was close, but D did not make it clear that D's acceptance of P's offer was conditioned on P's acceptance of the terms. The court weighed in on the last line of the 1st subsection of 2-207--unless acceptance is expressly made conditional on assent to the additional or different terms.

Held that D did not clearly express its unwillingness to proceed w/ the deal WITHOUT the incorporation of the additional terms.

Iii.-

If the terms of the box-top held, the risk distribution b/n the parties would be substantially altered, thereby materially altering the agreement.

No warranty--P bears risk

Warranty--D bears risk

**The box-top license should have been treated as a written confirmation containing add'l terms -- a proposal.

Conclusion:

Remanded for further consideration re: the express & implied warranty claims against D.

Comments:

How many expressions of "acceptance" are in this case?
Why does the court reject D's arg that this was a conditional acceptance?
A: D did not make it clear that it REFUSED to accept the agreement UNLESS the additional terms were incorporated
How does the ct characterize the box-tops?
A: Written confirmation containing add'l terms-- a proposal (??) that is not allowed to be incorporated b/c of its effect-- it would materially alter the terms of the agreement
Switched the risk from D to P

trial de novo

n. a form of appeal in which the appeals court holds a trial as if no prior trial had been held. A trial de novo is common on appeals from small claims court judgments

*Here, the appellate ct reviewed the D Ct's decisions in this manner b/c the D Ct had decided the questions of K formation & interpretation as issues of law…. (So now, the appellate ct can also weigh in on issues of fact?)

Conditional acceptance: an acceptance that includes a term or condition which was not part of the original offer & therefore considered to be a "qualified" acceptance & thus an implicit rejection of the offer.

Later, these shrink wrap licenses were held to be valid Ks b/c the customer has the ability to return the product if they don't want to accept.

2-207: Anyone of those factors in addition to material change is enough.

How to work through a 2-207 problem:

Does the expression of acceptance contain additional terms?
No- no problem.
Yes- Does the experssion of acceptnace condition on the acceptnance of addiotnal terms?
Yes- Counteroffer. NO K formed on paper.
No- Do the additional terms materially alter the bargain?
- No-Additional terms become part of the agreement unless objected to (rejected by offeror) or unless offer expreslly limits acceptance of the terms of the offer
- Yes- add'll terms DO NOT become part of the agreement.

Flow Chart 2-207

Wednesday, October 15, 2008

7:08 PM

Did the parties perform?

YES

K is formed. Terms are those on which writings agree + gap-fillers.

K is NOT formed

subsection 3 of 2-207

Itoh v. Jordan

Thursday, October 16, 2008

6:41 PM

Itoh & Co. (America) Inc. v. Jordan Int'l Co.

7th Circuit, 1977

P is Itoh

D is Jordan

Facts:

P sent D a PO for steel coils

D sent back its acknowledgment form: "Seller's acceptance is expressly conditional on buyer's assent to the additional or different terms and conditions set forth below and printed on the reverse side. If these terms are not acceptable, Buyer should notify seller at once."

One of the terms was an arbitration clause that had no counterpart in P's PO

After the goods (steel) had been delivered and paid for, P sued D claiming that the product was defective and had been delivered late

D moved to stay the proceedings pending arbitration & was denied.

From a denial of motion, D appealed.

Issue:

Whether aribtration may be considered a supplementary term incorporated under some other provision in the UCC for this agreement. (is it part of the k?)

Sub question: What is a "supplementary term"?

Rules:
2-207 (3) b/c of the "assent made expressly conditional" language in subsection 1.

Analysis
of the Appellate Court:

-This is a classic "battle of the forms" case.

-B/c D's arbitration term did not result in the formation of a K but instead it fxed as a counter-offer...

D's acknowledgement was a counter-offer, not an acceptance

-Since P's PO & D's counteroffer did not create a K together, 2-207(3) would operate to create one b/c the subsequent performance by both parties constituted "conduct by both parties which recognizes the existence of a K"

...No K under section 1 no K was created by the exchange of forms

K was formed under section 3 b/c the parties did perform

(P paid for and D delivered the goods, so the parties' conduct here recognizes the existence of a K b/n them)

Is the arbitration provision a term upon which the parties agree?

NO. The offer by P was silent on arbitration.

Is arbitration a supplementary term incorporated under some other provision in the UCC?

Not really. See below...

-The court comes up short in trying to find a definition for "supplementary terms" in the Code itself or case authority.

However, the court reasons the phrase, "terms of the writings of which the parties agree" in subsection 3 necessarily excludes all terms on which the parties DISAGREE.

Therefore, the terms that the parties DISAGREE over cannot be brought back into the K under 2-207 under the guise of "supplementary terms"

Instead, the court says that supplementary terms are limited to those supplied by the standardized "gap-filler" provisions of Article 2.

Since provision for arbitration is NOT a necessary or missing term which would be supplied by one of the Code's gap fillers unless agreed upon by the parties, there is NO arbitration term in this K by the conduct of the parties to perform even though no K had been established by their exchange of writings.

No unfair prejudice should arise from this conclusion to the seller. When he inserted the term that acceptance is expressly conditional on buyer's assent to add'l terms, the seller received a substantial benefit under 2-207(1) b/c he is now able to walk away from the transaction w/o incurring any liability so long as the buyer has not in the interim expressly assented to the additional terms. (Counteroffer=prolonged period of revocation)

The possible prejudice that could arise in this situation from such an insertion of add'l terms is w/n the scope of control of the seller. It's his choice to insert this phrase. If he later decides to go through w/ the deal even if the buyer has NOT expressly consented to the additional terms, it's his problem b/c he has then demonstrated an intent to be bound by the K regadless of the buyer's assent. When this happens, the seller effectively LOSES the benefit of those add'l terms.

"New term" = ambiguity. Here it was "injected" by the seller. The seller, then, should bear the consequence of that ambiguity under subsection 3.

Conclusion:

Affirmed. Even though D's acknowledgment fxed as a counter-offer b/c it added terms and expressly conditioned d's acceptance on P's assent those terms, there was a K b/n them b/c of their conduct.

Notes:

-P's acceptance & payment for the steel did not constitute as assent to D's add'l or different terms b/c the UCC does not provide a definition of "assent"

No gap filler for arbitration

Gap fillers do exist for warranties.

Use flow chart!

Different or Additional Terms

The difference b/n "different terms" and "additional terms" is the difference b/n subsections 1 and 2 of 2-207.

Thursday, October 16, 2008

7:30 PM

Northrop Corp. v. Litronic Industries

7th Circuit 1994

P=Northrop, a giant defense firm

D=Litronic, manufacturer of computer parts

Facts:

An offer was made by D to sell printed wire broads to P for a weapons system.

The offer contained a 90 day warranty that was stated to be in lieu of any other warranties.

P's return invoice contained a warranty period that was unlimited in its duration.

After 90 days had passed, P attempted to return some of the wire boards b/c they were defective. (It was actually 6 mos. later)

D refused to accept them, arguing that the 90 days had passed and the warranty period had lapsed.

PH:
-Went to court with the preliminary question of how to treat terms that were "different" from but not "additional" to those of the offer under subsection 2.

-J for P in trial court

-D appealed

Issue:
Was the buyer's change in warranty a material alteration to the agreement?

Analysis:

-We know that K's are possible when there are different terms, but how do we decide which of the terms to use? Subsection 2 only mentions "additional" terms but not "different" … what to do?

Three views:

One option is to drop out the discrepant terms and replace them w/ UCC-provided "gap fillers"
- This is the majority view
- Was followed by a magistrate re: 2-309 in this case … 2-309 provides that nonconforming goods may be rejected w/n a "reasonable" time. This judge held that 6 mos. was reasonable (P took 6 months to reject D's goods b/c of the complexity of board testing)
- Under this view, if the buyer tries to spring a surprise (the seller can't here b/c his terms won't prevail if the acceptance contains unless the acceptance contains the same terms) the parties then move to neutral ground.
  - Both parties have a better chance of preventing the element of surprise.
Another view is that the offeree's discrepant terms drop out and the offeror's terms become part of the K (the original offer?)
- Leading minority view… If followed here, D would prevail. Offeror remains the master of the offer.
- This may tempt the seller to spring a surprise on the buyer, hoping that the buyer won't read the fine print
A third view (the most sensible) is to make "additional" and "different" mean the same thing. Then the outcome will depend on whether the new terms in the acceptance are materially different than the terms of the offer. If they are, these new terms then fx as proposals & are NOT used unless the other party consents to them. If they are not materially different than the terms in the offer, then they become part of the K.
- This is the J. Posner view
- This view is bolstered by evidence that the omission of the phrase "or different" from subsection 2 was a mistake (subsection 2 only contains "additional")
- Regardless of the history, this is hairsplitting. Additional terms ARE different terms; different terms ARE additional terms
- This is the one we're going w/ although it's only be adopted by California.
- Under this view, D's offer of a 90 day warranty was the only warranty in the K b/c the unlimited warranty in P's acceptance was materially different
  - in the absence of some industry custom setting a limit on warranties that do not specify a duration

Illinois (the state in question) tends to adopt majority views, and b/c of the desire to adopt the Code in a uniform manner across the nation, would probably mesh w/ this decision.

This is a federal judge sitting in on a case that's decided under state law. The job of the court, therefore, is to predict state law. (Erie Doctrine)

The idea behind the majority view is that the presence of different terms in the acceptance suggests that the offeree didn't really accede to the offeror's terms, yet both parties wanted to K… why not find a neutral term to govern the dispute that has arisen b/n them?
- They canceled each other out (Knock Out Rule) NOBODY gets their warranty terms. The UCC steps in & provides UCC default provisions 2-309 and 2-601 (better one) as gapfillers.
  - Under 2-309 nonconforming goods may be rejected w/n a reasonable time.
  - P won b/c the warranty provision provided in UCC favored it-- it did NOT get its desired terms.
    - Court held that 6 mos after goods were delivered were a reasonable amt of time to reject non conforming goods.
  [The buyer might not have had any serious problem w/ the terms standard form containing a pre-printed boilerplate w/o giving any thought to its contents or to its suitability for the particular K in question. (And definitely NOT assenting)
  - If the seller doesn't want to do business w/o assent to specific terms, he doesn't have to]

Conclusion:

Even though the "California rule" solves all the problems contained in the majority rule, since this court thinks that Illinois would be more inclined to adopt the majority rule, they affirm for P.

Concurrence:

J Ripple thought that the court should not have taken an "institutional" position as a federal court on the preferable understanding of the UCC (the California Rule)

*There was a material change in the bargain when it changes from a 90 day warranty to an infinitely long warranty. The application of the majority rule here is the most equitable.

For this case...

Does the expression of acceptance contain DIFFERENT terms, not just additional terms?

Yes.

Is acceptance conditional on assent to the different terms.

No.

The different terms knock each other out and are replaced by suitable gap-fillers.

Suggested gapfillers: 2-314 (Implied warranty of merchantiability) and 2-315 (implied warranty for fitness for particular purpose)

Best Shot Rule:

(Replaces Knockout rule)

When the court is faced w/ discrepant terms on 2 different forms the court should choose only one and make its decision based on equity. This solution would enhance the incentive of each party to the concerns of the other into account when drafting the form.

Solutions to the problem:

This decision is based on the "Knockout Doctrine"

Under this approach, when the 2 terms are materially different from one another, they cancel each other out and then the UCC steps in to provide a "gap filler"

This is the majority rule
When terms are different, bypass 2-207 completely… Additional terms = proposals; different terms = knock each other out and the default provisions of the UCC fill in the blank (Go to subsection 3)
Some would argue that this is more fair b/c it enhances the importance of the Code's gap-fillers, most notably those in the warranty sections which in most cases work to the general advantage of buyers.
- "If warranty, remedy & arbitration terms are so important to the sellers, then those terms should be negotiated. If the seller is not willing to sacrifice the time & effort it takes to do this, then he should be willing to abide by the rules of Article 2" (I assume "sales" in the UCC scheme)
Others argue that sellers are driven to the strategic use of forms to avoid the imposition of these gap-fillers that, to them, unreasonably favor buyers.

Idaho follows the majority view.

Other Ideas:

Overriding "Master" Agreements: One option for parties who frequently engage in business w/ one another

Get trade associations to work out std terms to which its members agree

Electronic data interchange is another means of reducing sales terms to an agreed "transaction set" to be used b/n trading partners in all future sales

The above practices go to show that the Battle of the Forms has not been a ferocious as may have been supposed

First Semester

Tuesday, November 25, 2008

Battle of the Forms--UCC 2-207

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