UCC 2-207 Question Forum

[cmartin5970]

I am working on a Contracts Practice Exam Hypo, and have a question about 2-207 and different terms. In this hypo, A asks B if B will sell 10,000 products. B says we gladly accept the order and includes additional terms. A then responds by saying "order confirmed: please ship 20,000 instead of 10,000". This seems to be a lot like the minneapolis & st. louis railway co. v. columbus case, if anybody has read it, but approaching it post UCC 2-207. My question is how to handle the different terms, which are quantity. I know that UCC gap-fillers can be used for different terms using the knockout rule, but it seems like most examples in class of using gap-fillers involved disagreement over minor terms like an arbitration clause, but not essential terms like quantity. Because without quantity or a requirements contract it would likely not be definite enough.

My question is how should i handle these "different" terms. Would A and B have a an agreement on the terms other than quantity, and the contract would not be enforceable/definite until they agreed upon the terms? or would UCC gap-fillers be used (we didn't address gap fillers very much so if this is the obvious answer I'm sorry). I am really not sure how to analyze this but any info would be great. I've tried searching on the TLS forums but cannot find anything to answer this specific question

[I.P. Daly]

I could be wrong, but under this hypo, it looks like you'd want to 1) determine whether there's a enforceable contract; 2) perform a battle of the forms analysis; and 3) address modification under the UCC.

[cmartin5970]

and for the analysis i would discuss how they are treated as "different" terms so 2-207(2) would not apply and that most courts would use the knockout rule and that if these terms were knocked out then the contract would be too indefinite?

Also, would A be able to change his offer back to 10,000 or has it been rejected since it is a counter-offer because of the different terms?

[Jsa725]

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[I.P. Daly]

2-207 only applies to B's additional terms; not A's request for a modification. The analysis would be something like:

It's a k for the sale of goods so UCC applies. Both A & B deal in goods of the kind, so they're merchants. Discuss offer, acceptance, consideration, and mutual assent, et al; thus there's a valid k. Next, note B's acceptance contains additional terms, so 2-207 applies and discuss battle of forms (add terms become part of K unless they materially alter it). Finally, address A's request for a modification and note differences with how UCC and common law deal with modifications.

[cmartin5970]

so you would classify the 20,000 as additional and not different? my professor has stressed the difference between additional and different terms. I had never thought of approaching it that way though, and saying they both agree on the original 10,000 but the additional 10,000 is a proposal.

[Jsa725]

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[cmartin5970]

that makes a lot more sense, do any of you recommend a good source to help me further understand UCC 2-207? I've got the E & E and West's Principles of Contract Law and doing CALI lessons now

[Jsa725]

.

[cmartin5970]

thanks that all does help clarify everything, i felt like i understood it to an extent before but now hopefully i can recognize and apply it

[icecold3000]

Assuming that "A" made an initial inquiry, and "B" made an offer, then A's purported acceptance of B's offer to increase the quantity to 20,000 would not be a definite and seasonable expression of acceptance. Even if A used the word's "I accept" in the response, doubling the quantity of goods cannot be an acceptance. If 2-207 operated like this, the offeree would be able to change the bargain in an unfair way. The only way these parties may be bound under this fact pattern is under subsection (3) conduct.

Check out the cali lesson on 2-207 where this same issue comes up.

[Jsa725]

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[jgc02a]

I am working on a Contracts Practice Exam Hypo, and have a question about 2-207 and different terms. In this hypo, A asks B if B will sell 10,000 products. B says we gladly accept the order and includes additional terms. A then responds by saying "order confirmed: please ship 20,000 instead of 10,000". This seems to be a lot like the minneapolis & st. louis railway co. v. columbus case, if anybody has read it, but approaching it post UCC 2-207. My question is how to handle the different terms, which are quantity. I know that UCC gap-fillers can be used for different terms using the knockout rule, but it seems like most examples in class of using gap-fillers involved disagreement over minor terms like an arbitration clause, but not essential terms like quantity. Because without quantity or a requirements contract it would likely not be definite enough.

My question is how should i handle these "different" terms. Would A and B have a an agreement on the terms other than quantity, and the contract would not be enforceable/definite until they agreed upon the terms? or would UCC gap-fillers be used (we didn't address gap fillers very much so if this is the obvious answer I'm sorry). I am really not sure how to analyze this but any info would be great. I've tried searching on the TLS forums but cannot find anything to answer this specific question

uhhhh dude. are the parties merchants? if one of them is non-merchant then additional terms are considered as mere proposals.
if they are both merchants, then additional terms are included unless 1) material alteration 2) the offer expressly limits acceptance to the terms of the offer or 3) the offeror has already objected to the particular terms, or objects within a reasonable time. Couldn't you argue for issue #1 that the change in quantity was a material term, and therefore the original terms of the offer govern?

[mr.hands]

here is how i read it: A makes inquiry, B makes offer, A confirms (accepts)
2207(1) A definite and seasonable expression of acceptance or a written confirmation which is sent within a reasonable time operates as an acceptance
("order confirmed: please ship 20,000 instead of 10,000")
A and B have valid K for 10,000 goods next...

2207(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:
(b) they materially alter it; or

therefore, if A and B are merchants, then proposal (20,000 goods) becomes part of the K, UNLESS.... (they materially alter the K)
it seems that doubling the quantity materially alters the K.
B can enforce the 10,000 and is not obligated to ship 20,000.

I follow you the entire way except for the last step. I agree that the 20k *has* to be a material change to the contract, but why do we ignore it and go with seller's offer of 10k? I thought that conflicting terms are "knocked out" and replaced with UCC gap fillers. Since there is no gap filler for quantity in a sale of goods, there's no contract at all.

i need to brush up on my contracts...

EDIT: I'm basing this last move off the UCC 2-207 flowchart, which says different terms are knocked out. I've also read elsewhere that the different terms are just dropped...now confused

[Jsa725]

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[mr.hands]

Ah interesting. That's definitely something i'll have to remember. Thanks a lot for the help, that's easily the best 2-207 advice i've gotten. period

damn you 2-207.

[ktc88]

I spent alot of time back in contracts / commercial law "flowcharting" 2-207. I realize it's not an actual image flowchart, but this has worked really well for me for any 2-207 question. It's possible maybe it only works for me and the way I read / think of things but if it helps:

Battle of the Forms
§2-207: Arises with exchange of boilerplate forms. See §2-206 for offer. For acceptance with differing boilerplate:
IF an acceptance with additional or different terms is:
(1) Written
(2) Seasonable (encompass reasonable)
(3) Definite expression of acceptance
(4) Not expressly conditional on the additional or different terms (this would be counter-offer)
THEN the acceptance is valid and the additional* terms are proposals, but do not enter contract. BUT
IF both parties are merchants, such terms do become part of the contract, UNLESS:
(1) The offer expressly limits acceptance to terms of offer, or
(2) The terms materially^ alter it, or
(3) Notification of objection to them given within a reasonable time
IF counter-offer (no acceptance), and no acceptance (here or express assent, but not silence), BUT parties perform
THEN contract is only for the terms in agreement; others are supplied by law.
The UCC, or CL if necessary will fill in for the missing terms.
*Exclusion of “different” here. Several options for different terms:
(1) Treat different terms as additional, like in §2-207(1) (comment 3 DOES apply different terms to §2- 207(2))
If we treat terms this way, they will always fail §2-207(2)(b) though; first shot will always win
(2) Let them cancel each other out (knockout provision) (most common outcome; comment 6)
(3) Use common law (mirror image); last shot will win here (not in the spirit of the statute)
^When are the terms material? They would result in surprise or hardship (but typically both.)
Comment 4 and 5 list concrete examples.
Written confirmations of oral agreements: Literal reading of statue impossible; use §2-207(2)