Additional or Different Terms in Sale of Goods Contracts UCC departs from

Additional or different terms in sale of goods

  • University of Texas
  • LEB 323
  • Notes
  • kellmargs2
  • 12
  • 100% (3) 3 out of 3 people found this document helpful

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Additional or Different Terms in Sale of Goods Contracts - UCC departs from strictness of common law on this issue because companies use their own forms that have different terms when offering and accepting deals - This is to protect against defendants who would claim no contract and do shady things - Section 2-207 of UCC addresses the issue of “form swapping” in business. - Offeree’s acceptance is true even if added or different terms exist in their acceptance unless they expressly state acceptance is conditional on new/different terms. If key terms are different in acceptance (like price) not acceptance but counter offer. - If offeree’s form has conflicting terms they do not become part of the contract unless offeror expressly agrees to them
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- If offeree’s form has additional terms and both parties are merchants it becomes part of the contract unless offeror originally stated acceptance was limited to original terms, the term materially alters the deal, or the offeror rejects term in reasonable amount of time - When seller and buyer make informal agreements their contract is based on the informal understanding but if forms are subsequently sent as confirmation Section 2-207 of UCC is applied to determine which new and different terms are part of the contract - If disputes on key terms does not create a contract, but buyer and seller perform their expected duties (deliver and pay respectively) a contract has been created by their conduct that showed clear intent - Courts treat software as a good and apply 2-207 of UCC to it. Treat the seller as an offeror. This causes buyer to be bound by terms they may not have had time to read. Requirement that an Acceptance be Unequivocal - Acceptances cannot be indefinite or tentative. It is up to courts to interpret. When Does Acceptance Take Effect - Acceptances, like offers, rejections and revocations, are effective upon receipt - Can also be considered effective once sent through a reasonable medium (Mailbox) - Medium reasonable if 1) same one used by offeror, 2) customarily used in prior dealings of parties, 3) customarily used in industry, or 4) authorized by language of contract. - If medium not reasonable, acceptance effective once received - If medium is reasonable, once it has been sent offeror cannot rescind. Exceptions - If offeror expressly states acceptance effective only when received by offeror - Offeror may also require acceptance be made through a particular medium and if that medium is not used the acceptance is only effective upon receipt - If offeror sends rejection and changes mind to send acceptance, whichever arrives first will be effective - Emails are effective acceptance only once they reach offeror’s inbox (can be unread) CUSHING v. THOMSON (1978) Facts: - Anti-nuke group (Clamshell Alliance) sent an application to the Adjutant General of NH’s office requesting to rent an armory for a dance they were planning.
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