Battle of the Forms - Summary

The basic components of the Battle of the Forms Rule are as follows:

IF only one party is a merchant, than any alterations in offeree’s form (large or small) are merely treated as proposals to the contract (which mean none will automatically become part of any express contract between them.

On the other hand, where BOTH PARTIES ARE MERCHANTS, here’s what happens:

a.                  Material alterations contained in offeree’s response drop out automatically (unless of course, expressly agreed to by the offeror, in which case, they’re not arguing about it in court)

Examples of Material alterations:  indemnification provisions; binding arbitration provisions; a choice of law/venue different from that proposed by offeror (or one which would result in surprise or hardship to offeror); a clause negating standard warranties of merchantability or fitness for a particular purposes in circumstances where it would normally attach.

(source:  notes to UCC Comment)

b.                  Non-material alterations become part of the parties’ agreement unless objected to within a reasonable time after receipt

Examples of Non-material alterations: a clause fixing a reasonable time for complaints within customary limits; a clause providing for interest on overdue invoices or fixing seller’s standard credit terms within the range of trade practices  (source:  notes to UCC Comment)

Possible variations:

If, however, the language of the OFFER limited acceptance to the terms of the offer: the offeror’s terms and conditions apply to the transaction.

If, on the other hand, language of the OFFEREE’s RESPONSE form conditions its acceptance on the inclusion of each and every term of that response (and the terms alter those of the offer either by adding or changing terms), then there is no express contract. 

A contract, if any between the parties, shall consist of:

            a)   The conduct of the parties plus

b)      Those terms on which the parties’ forms agree plus

c)   UCC gap fillers (if necessary)

***

(issues to study from Intro/Mutual Assent chapters, continued…)

1.                  Know the mirror image rule and when it is used.

2.                  Know the concept that an acceptance will only include those terms that are legal and of which offeror had reasonable notice (even if offeror never bothered to read them)

3.                  Know the general rule re: whether or not an offeree’s silence automatically constitutes acceptance (general rule:  it doesn’t)

4.                  Know the legal effect of an offeror’s stipulating:

a.       the means of acceptance

·        an offeree’s failure to use the means stipulated will result in no contract even if received in a timely fashion

b.      the timing of acceptance

·        offeror can stipulated that acceptance shall only be effective on receipt, (thereby sidestepping the mirror image rule).