UCC 2-207 Question Forum

[Extension_Cord]

If there are additional terms in a merchant-nonmerchant agreement, the terms are treated as proposals.

Are these proposals brought into the agreement by the offerors silence? When?

If so, then that would mean terms that materially alter the contract can become apart of the contract in Merchant-Nonmerchant relationships because 2-207 says all additional terms are proposals in merchant/nonmerchant dealings unless there was a qualified acceptance.

Also, when exactly does the knock-out rule come into play? I was under the impression it was only when there were two merchants, but UCC doesn't seem to say that.

[rogermurdoch]

If one of the parties is not a merchant then it is just a proposal and the offeror would have to accept the term. Notice of rejection is only required with additional terms between merchants. I would imagine the same rule for any acceptance by silence applies, i.e. that there is almost never acceptance by silence except in very limited circumstances (like if prior dealings of the parties suggest silence is permissible). I can't think of a hypo where 2-207 would apply and prior dealings would allow silence to accept the proposed additional terms, but that's not to say it's impossible.

The knockout rule applies to different terms. My prof taught that different terms always knockout and are replaced by a UCC gap filler if there is one. Courts interpret this differently so not all professors teach it this way.

[Extension_Cord]

If one of the parties is not a merchant then it is just a proposal and the offeror would have to accept the term. Notice of rejection is only required with additional terms between merchants. I would imagine the same rule for any acceptance by silence applies, i.e. that there is almost never acceptance by silence except in very limited circumstances (like if prior dealings of the parties suggest silence is permissible). I can't think of a hypo where 2-207 would apply and prior dealings would allow silence to accept the proposed additional terms, but that's not to say it's impossible.

The knockout rule applies to different terms. My prof taught that different terms always knockout and are replaced by a UCC gap filler if there is one. Courts interpret this differently so not all professors teach it this way.

Thanks!

Official comment #6 to 2-207 states that if an answer is not received within a reasonable time after the different terms have been qualified as proposals, then they will be presumed to be assented to.

Now that I think about it, this is where ProCD / Step-Saver comes in, so rejecting the proposals isn't as important as defining who is the offeror / offeree...