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24 LACIVL § 12:1

24 La. Civ. L. Treatise, Sales § 12:1

Louisiana Civil Law Treatise


Database Updated November 2013

Louisiana Sales Law


Dian Tooley-Knoblett[a0]

David Gruning[a1]

Chapter
12. The Sale of Movables

§ 12:1. Scope of this chapter

Chapter 13 of Title VII on Sale is a sort of innovation. Entitled “Sales of Movables,” this chapter deliberately
absorbs several solutions and formulations that are identified with article 2 on sales of the Uniform Commercial
Code (UCC[1]), or with the Convention on the International Sales of Goods (CISG). Louisiana jurisprudential solu -
tions to problems particular to the sale of movables also appear in this chapter of Title VII,[2] as well as some rules
from the Louisiana Civil Code of 1870 that are carried forward there.[3] Problems and issues related to the transfer
of ownership and the risk of loss due to a fortuitous event during transit are discussed in Chapter 3 of this Treatise,
on transfer of ownership and risk.[4]

Louisiana was attempting here to handle several problems, perhaps more familiar to lawyers in other states,
which the Model UCC article 2 had taken on and tried to solve. The CISG, which appeared later and had the benefit
of experience under the UCC as well as foreign jurisdictions, also took a run at solving such problems. The best
known of them (or most notorious) is doubtless the solution to the battle of the forms. Model article 2 also addressed
the different actions the buyer may take if the seller fails to deliver goods that conform to the contract: the buyer
may inspect the goods to verify conformity, the buyer may accept them notwithstanding nonconformity, the buyer
may reject them because of nonconformity, the buyer may accept the portion of a delivery that does conform and re-
ject the rest that does not, and the buyer having rejected things for nonconformity must decide what to do with them.
If the seller breaches by failing to deliver conforming goods or by failing to deliver at all, the buyer may buy other
things in substitution, or “cover,” consistent with the rule on mitigation of damages. Nevertheless, sometimes the
seller who acts quickly may “cure” the nonconformity.

[FNa0] Jones Walker

Distinguished Professor of Law

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24 LACIVL § 12:1
24 La. Civ. L. Treatise, Sales § 12:1

Loyola University

New Orleans College of Law

[FNa1] William L. Crowe, Sr.,

Distinguished Professor of Law

Loyola University

New Orleans College of Law

‌ ‌

[FN1] Unless otherwise noted, “UCC” refers to the version of the Uniform Commercial Code drafted and
approved as a joint project of the National Conference of Commissioners on Uniform State Law (NC-
CUSL) and the American Law Institute (ALI). The enacted version of the UCC in any particular State may
vary from the version recommended by the ALI and NCCUSL. Louisiana, of course, has not enacted article
2 as such, but it has enacted most other articles of the UCC, including article 9 on Secured Transactions.
Louisiana has also enacted article 1 of the UCC, and our article 1 states that we are to refer to the portions
of the UCC that Louisiana has enacted as the “Louisiana Uniform Commercial Code,” without a trace of
irony. If Louisiana had only enacted those parts of article 2 that appear in chapter 13 of Title VII of the
Civil Code, that would make Louisiana's use of the title “Uniform” Commercial Code odd. But Louisiana is
not alone. True, Louisiana is the only state that has not made article 2 part of its statutory law. There are,
however, non-uniformities in the enacted versions of the UCC in other states as well. The states are not of
one mind, for example, how far to enact the recommended rules on self-help repossession in article 9. In -
deed, no state has enacted the revised version of article 2 that was complete in 2003. Moreover, the Ameri -
can Law Institute officially withdrew the 2003 amendments to article 2 in 2011. Updates from the 88th An -
nual Meeting, The American Law Institute (Oct. 14, 2011), http://2011am.ali.org/updates.cfm.

[FN2] C.C. art. 2611 on the seller's right of resale does this, with the familiar but problematic revision com -
ment, which states: “This Article is new. It does not change the law, however, as it gives formulation to a
principle often recognized by the Louisiana jurisprudence.” C.C. art. 2611 revision comment (a). However,
a Code article does not serve the same legal function as a line of jurisprudence, even a highly precise one,
for many reasons.

[FN3] See C.C. art. 2612 revision comment.

[FN4] See §§ 3:21 to 3:29, supra.

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24 LACIVL § 12:2
24 La. Civ. L. Treatise, Sales § 12:2

Louisiana Civil Law Treatise


Database Updated November 2013

Louisiana Sales Law


Dian Tooley-Knoblett[a0]

David Gruning[a1]

Chapter
12. The Sale of Movables
I. Battle of the Forms

§ 12:2. The battle of the forms

Articles 2601 and 2602 provide that when the parties both act as if they believe they have a contract of sale but
“say” that they do not or deny that certain terms are part of the contract, the law will pay more attention to what they
do than to what they say. Thus, these articles seem to provide that the law will hold the offeror and offeree to a con -
tract they did not make or did not know they made. At the very least, they change the basic rule on formation of con-
tract that requires the acceptance of an offer to accept all of the offer, and in every detail. This requirement is often
labeled the mirror-image rule, and in the Louisiana Civil Code the principle behind it is expressed in article 1943,
which requires an acceptance to accept the offer in order to avoid being treated as a counteroffer and therefore as a
rejection of the offer.[1]

This is a strange idea. How it made its way into Title VII of the Civil Code, where the foundation of the theory
of contract is consent, requires a bit of explanation.

[FNa0] Jones Walker

Distinguished Professor of Law

Loyola University

New Orleans College of Law

[FNa1] William L. Crowe, Sr.,

Distinguished Professor of Law

Loyola University

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24 La. Civ. L. Treatise, Sales § 12:2

New Orleans College of Law

‌ ‌

[FN1] Note that C.C. art. 1943 does not literally state that such a purported acceptance rejects the offer, but
the implication is plain.

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24 La. Civ. L. Treatise, Sales § 12:2

Louisiana Civil Law Treatise


Database Updated November 2013

Louisiana Sales Law


Dian Tooley-Knoblett[a0]

David Gruning[a1]

Chapter
12. The Sale of Movables
I. Battle of the Forms

§ 12:3. Good faith versus the mirror image rule

We believe it helps to keep in mind that the primary purpose of provisions such as articles 2601 and 2602, and
their cousins in the UCC and the CISG, is to prevent a party from asserting in bad faith that no contract was formed
in order to escape from his contractual obligations. In the commercial context, the temptation to escape is not hard to
find. For example, the seller agrees to sell chips to the buyer at $50 per chip; the market price soars to $120 per chip.
If the seller can discover a reason that he need not sell at $50, he will be very tempted to use it. In another example,
the buyer agrees to buy circuits at $100 per circuit; the market price drops to $30 per circuit. Likewise, if the buyer
can discover a reason not to buy at $100, he will be very tempted to use it.

The basis on which such a seller or buyer might escape a contract is available in the basic principle of the law of
contract, namely, that no one is bound to perform a contract unless an offer was made by the offeror and accepted by
the offeree. Using the example of the chips above, the buyer and the seller would negotiate and agree on a price, ne -
gotiate and agree on delivery terms, and perhaps several other terms. These terms are usually labeled “dickered”
terms because the parties dicker over them, for example, the buyer seeking to pay less, the seller to be paid more,
until they arrive at a number both assent to. Then the buyer will usually submit a written document such as a pur-
chase order, a written offer to buy. The seller will return a written acknowledgment, which functions as an accep -
tance. The purchase order and the acknowledgment will set out all the dickered terms, and the parties will almost al-
ways be alert to any discrepancy in these.

However, the buyer's form and the seller's form will often contain several hundred lines of other provisions.
These other provisions are the buyer's or the seller's standard terms, sometimes called boilerplate. These are usually
drafted by legal counsel, which are therefore technical in style, and which in general neither party reads during the
process of negotiating a sale. Because such provisions are slanted in favor of the party drafting them, and because
they are technical in nature, it would be strangely miraculous if the two sets of standard terms happened to agree,
point by point. Usually, they do not.

Because they are not the same, when we confront a transaction in which two sets of standard provisions are in
play, the offeree does not accept all the terms of the offer. Without an acceptance of the terms of the offer, there is
no contract. If we require the acceptance to accept every point within the offer, with no attempt to change a single

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point, then we require the acceptance to reflect every term of the offer exactly. Hence, this rule is called the mirror
image rule.

Enforcing the mirror image rule would permit the seller when the price soars and the buyer when the price
dives, as in the examples above, to escape an unfortunate bargain. Either party could do so by insisting that he be -
lieved that he had obtained the assent of the other party to all of his standard terms but now he is most disappointed
to learn that in fact he had not. Without that assent, there is no contract.[1] Making such a claim, of course, fails the
test of good faith because the party making it was not even conscious of the terms he now claims matter so much.
He did not subjectively believe that he had obtained the assent of the other party to those terms for the simple reason
that he did not care about them when entering the contract.

To explain the entire history of the development and application of the rule in U.C.C. § 2-207 and in article 19
of the CISG would take us too far afield. The literature that has developed interpreting both of these provisions is
extensive and technical to an extent that would be difficult to summarize economically and does not seem, to us at
any rate, especially useful for the user of this treatise. We will focus instead on an explication of articles 2601 and
2602 within the context of Louisiana law and jurisprudence.

[FNa0] Jones Walker

Distinguished Professor of Law

Loyola University

New Orleans College of Law

[FNa1] William L. Crowe, Sr.,

Distinguished Professor of Law

Loyola University

New Orleans College of Law

‌ ‌

[FN1] A case that was decided in this way is Poel v. Brunswick-Balke-Collender Co. of New York, 216
N.Y. 310, 110 N.E. 619 (1915). In that case, the buyer's order, which followed the seller's document in
time, differed from the seller's in just one way: it provided that the seller had to “promptly acknowledge”
the buyer's order, which the seller did not do. The buyer wanted out of the contract and the court opened the
door, using the mirror-image rule.

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24 LACIVL § 12:4
24 La. Civ. L. Treatise, Sales § 12:4

Louisiana Civil Law Treatise


Database Updated November 2013

Louisiana Sales Law


Dian Tooley-Knoblett[a0]

David Gruning[a1]

Chapter
12. The Sale of Movables
I. Battle of the Forms

§ 12:4. The current law—Article 2602

Article 2602 begins: “A contract of sale of movables may be established by conduct of both parties that recog -
nizes the existence of that contract even though the communications exchanged by them do not suffice to form a
contract.”[1] This rule alludes to the fact that ordinarily a contract is formed when the communications of the parties
do form the contract. And those “communications” are usually the offer and the acceptance. That process of commu-
nication is set out in Book III, Title IV on Contracts, Chapter 3 on “Consent,” which states as a general rule that con-
sent is “established through offer and acceptance.”[2] Only one article concerns us here, namely, article 1943, which
states: “An acceptance not in accordance with the terms of the offer is deemed to be a counteroffer.” This rule, then,
would provide that when an offeree in receipt of an offer to sell (or to buy) communicates an acceptance that does
not agree with the terms of the offer, no contract is formed. Article 2602 purports to change that result if, despite the
fact that the acceptance does not form a contract, the parties nevertheless act so as to justify a belief that there is a
binding contract between them, by delivering the thing and by paying the price, for example. If the parties act in this
way, one solution might be that the suppletive provisions of the Civil Code fill all the gaps in their contract. This is
not the route article 2602 takes. Instead, article 2602 salvages those aspects of the communications that do agree and
makes them part of the contract, by stating: “In such a case the contract consists of those terms on which the com -
munications of the parties agree, together with any applicable provisions of the suppletive law.” This plainly implies
that where the offer and the acceptance do not agree, those proposed elements of the contract drop out, or are
nudged or knocked out.[3]

The scope of article 2602 is limited. For it to apply, there must be conduct that the parties may reasonably un -
derstand as indicative of consent to the contract, and upon which a finder of fact may rely in order to accept that
there is consent to a contract of sale. If the conduct relied upon by the party trying to enforce the contract consists of
the other party's performance, for example, this is strong evidence of the other party's intent to be bound. Thus, the
buyer may submit evidence that the seller has delivered the goods pursuant to their contract as evidence that the

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seller intended to enter a binding contract of sale. Somewhat less convincing evidence of the other party's intent to
be bound would be performance by the party who wants to enforce the promise of the other. Thus, the buyer may
submit evidence that it has paid or has tendered payment to the seller as evidence of the seller's promise to deliver in
order to enforce that promise. The seller's acceptance of the buyer's payment might indicate the seller's intent to be
bound to the contract of sale pursuant to which the buyer is paying the price.

It is possible that other conduct might also indicate assent to the contract, such as conduct of a party in reliance
upon the existence of a contract of sale. As a question of evidence, however, one party's conduct in anticipation of a
particular contract of sale might also plausibly be conduct that prepares for another sale, or even for another poten -
tial sale. Such conduct will more naturally be ambiguous, equally indicating an intent to enter another contract (or
no particular contract) as well as the particular contract of sale that one party wishes to enforce.

What limits article 2602, then, is the need for one party to have at least done something that reasonably mani-
fests assent to the contract. If neither party has performed, nor done anything at all, and the sale remains fully execu-
tory on both sides, article 2602 is not much help.

[FNa0] Jones Walker

Distinguished Professor of Law

Loyola University

New Orleans College of Law

[FNa1] William L. Crowe, Sr.,

Distinguished Professor of Law

Loyola University

New Orleans College of Law

‌ ‌

[FN1] We begin with C.C. art. 2602, before the provisions of C.C. art. 2601, because it seems more logical
to us to address the articles in this sequence.

[FN2] C.C. art. 1927. This definition of consent seems too narrow. In most contracts of even moderate

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complexity, the parties negotiate several distinct elements of the contract, until a document is produced that
both parties sign. Certainly there is consent in such a case, but just as certainly there is not one offer and
one acceptance within the document, and in fact there is no offer and no acceptance as such for the whole
document. Teasing out who is the offeror and who is the offeree with respect to any particular element of
the contract seems pointless and impossible. Thus, the definition in the Code cannot be exclusive.

[FN3] C.C. art. 2602 would handle the situation in Poel, see § 12:3, supra, by finding that the seller and the
buyer formed a contract of sale, and the buyer's requirement in its acceptance of prompt acknowledgment
would fall by the wayside. See also CPI Card Group-Nevada, Inc. v. Traffic Jam Events, LLC, 2012 WL
6500236 (E.D. La. 2012) (seller prevailed on claim of contract because buyer did deny the existence of a
contract or that it received personalized plastic cards from seller for which it did not pay; C.C. art. 2602 sat-
isfied).

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24 LACIVL § 12:4
24 La. Civ. L. Treatise, Sales § 12:4

Louisiana Civil Law Treatise


Database Updated November 2013

Louisiana Sales Law


Dian Tooley-Knoblett[a0]

David Gruning[a1]

Chapter
12. The Sale of Movables
I. Battle of the Forms

§ 12:5. The current law—Article 2601

Article 2602 provides support for the idea that parties may in a way “overrule” what they say by that they do:
they may form a contract by their conduct despite the fact that their communications do not satisfy the basic rule of
article 1943 on contract formation, namely, that the acceptance must conform to the offer—that the acceptance must,
at the risk of seeming redundant, accept the offer proposed and not propose a new offer. We will label any term of
the offeree that does not mirror the offer a “discrepant” term.[1]

Article 2601 is more surprising. It provides an avenue toward contract formation that is a clearer departure from
the principles of article 1943. Article 2601 provides that a contract may be formed by an exchange of conflicting
communications alone, without conduct. It does so in a way that is carefully drawn, so the reader should not over -
state its effect. It begins by stating, in part: “An expression of acceptance of an offer to sell a movable thing suffices
to form a contract of sale if there is agreement on the thing and the price, even though the acceptance contains terms
additional to, or different from, the terms of the offer[.]”[2] Thus, the parties must agree on what is being sold and
what is to be paid for it and agree to exchange the price for the thing and vice versa. The problem arises because, as
discussed above, the buyer's standard terms and the seller's standard terms differ in some respect: the seller's form
contains at least one discrepant term. Under article 1943, any discrepancy, no matter how small, is enough to defeat
the creation of an executory contract. The basic rule, then, of article 2601 is that such a small difference will not, by
itself, defeat contract formation. If the offeree intends to accept the offer and expresses himself in a way ordinarily
sufficient to accept, then this first rule of article 2601 is satisfied.[3]

That leads to the second element of article 2601, which deals with how to handle the discrepant terms proposed
by the offeree. First, the offeree might end the problem by insisting on his terms. If the offeree accepts the offer but
requires the offeror to accept the offeree's discrepant terms, whether additional or different, then no contract is
formed. If the offeree accepts the offer but does not insist that the offeror follow the offeree's changes, the offeree's
terms are not part of the contract but are treated instead as proposed modifications of the contract.[4]

The final innovation in article 2601 occurs in the second paragraph, which creates a distinct rule for merchants.

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If buyer and seller are “merchants,” then some of the discrepant terms proposed by the offeree do become part of the
contract. The beginning of the exception reads: “Between merchants, however, additional terms become part of the
contract[.]” Additional terms may become part of the sale between merchants, but not different terms.[5]

At this juncture, it is good to remember that in the civilian view of contract, there are no gaps. This is particu -
larly true of the nominate contracts, including: sale, lease, exchange, loan, suretyship, and so on. If the parties con -
tract a lease, even without knowing they have done so, the Civil Code's provisions on lease will fill in the gaps. The
parties will not need to stipulate a rule on reconduction, for example; the Code does that for them.[ 6] Thus, the rule
on reconduction is truly “part” of the lease if the parties say nothing about it.

Likewise, in sales, various elements of the contract tend to favor the buyer. Warranty is a good example.[7]
Therefore, the seller's forms tend to disclaim or at least to adjust the seller's warranties in the seller's favor. Assume
a sale in which the buyer sends a purchase order that says nothing about warranty, and in which the seller sends an
acknowledgment that requires all claims for warranty to be brought forward within 60 days. Clearly, the buyer's of-
fer was consistent with the Code's warranty against redhibitory defects, even if the buyer did not refer to it ex -
pressly, and therefore that warranty was under the Code “in” the buyer's offer. But for the limited purposes of article
2601, it is not. Thus, when the seller proposes to change it, the term in the seller's form that would do so should be
treated as an additional term, not a different one. Our argument is a fairly straightforward one and is based on the
text.

If we say that any express offer includes not only the terms that are there literally but also all the terms that the
Code supplies, then any discrepant term supplied by the offeree in a purported acceptance will be a different term. It
would be a different term either because it differs from an express term the buyer in our example has chosen to in-
clude in his offer. Or it would be a term that differed from a term that the law includes in the buyer's offer. But that
reasoning renders the provision of the Code we are attempting to interpret meaningless. That provision assumes that
discrepant terms are either different or additional, and that there must be some terms that are additional.

To take a slightly different example, assume the buyer's purchase order says nothing about dispute resolution
and that the seller's form chooses arbitration as the exclusive method of resolving disputes. This is a different term
on one view; the buyer does not need to choose through an express contractual provision the right to litigate disputes
in court: the law does that for him. Thus, when the seller in his form stipulates arbitration, one might consider it an
express term that is added to the express terms of the buyer's purchase order, or as a different term that attempts to
change a term that is “in” the buyer's purchase order because the law puts it there.[8] The point of view of article
2601 is that if one party does not care enough to express itself on point, then a reasonable proposal from the other
party may be included in the contract.

Before we go further, it is necessary to point out the next major limitation on the kind of additional terms that
become part of a contract between merchants. That limitation is that the additional terms only become part of the
contract if they do not “alter the offer materially,” and article 2601 gives its own definition of materiality in this con-
text: “Additional terms alter the offer materially when their nature is such that it must be presumed that the offeror

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would not have contracted on those terms.”

Under the letter of the law, then, one may seriously maintain that in a given trade in which arbitration is both
usual and perhaps the norm, the addition of arbitration to the buyer's express offer might not be material. The same
might be said for limitations of warranty. A comment to article 2601 suggests nevertheless that the addition of an ar-
bitration clause or the addition of a clause limiting liability should be presumed to alter an offer materially.[9]

Two other ways in which the offeree's proposed additions do not become part of the contract between mer -
chants appear in article 2601. First, the offeror may provide expressly that the acceptance must accept all of the
terms of the offer. This provision will now appear a bit strange; in essence, the effect of such a stipulation by the of -
feror is an express endorsement of the effect of article 1943. The second way in which the offeree's additional terms
will be without effect on the contract is if the offeror objects to them “within a reasonable time.” Again, if the of -
feror were unfortunate enough to be a careful reader of article 1943, he would not believe it necessary to make such
an objection.[10]

[FNa0] Jones Walker

Distinguished Professor of Law

Loyola University

New Orleans College of Law

[FNa1] William L. Crowe, Sr.,

Distinguished Professor of Law

Loyola University

New Orleans College of Law

‌ ‌

[FN1] There are two kinds of discrepant terms: additional terms and different terms.

[FN2] C.C. art. 2601 (in part). While this article refers literally only to an offer to sell, which would be only
the offer by the seller to sell, there is no reasonable basis not to apply it to offers to buy also. C.C. art. 2601
revision comment (i).

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[FN3] An interesting question arises. If the offeree has developed some expertise on the law of contract for-
mation, is it possible for such an offeree to formulate the necessary intent to accept an offer if he knows
that under C.C. art. 1943 he cannot accept? What if the offeree, who is not an expert, knows of the differ-
ences or even just of one difference between the offeree's form and the offeror's form? The rule seems to
require that the offeree be ignorant of such differences in order to have the ability to make “an expression
of acceptance.”

[FN4] C.C. art. 2601 ¶1 states:

An expression of acceptance of an offer to sell a movable thing suffices to form a contract of sale if there is agree -
ment on the thing and the price, even though the acceptance contains terms additional to, or different from, the
terms of the offer, unless acceptance is made conditional on the offeror's acceptance of the additional or different
terms. Where the acceptance is not so conditioned, the additional or different terms are regarded as proposals for
modification and must be accepted by the offeror in order to become a part of the contract. (Emphasis added.)

[FN5] The use of “additional” and “different” in this way comes directly from U.C.C. § 2-207, where the
unresolved nature of the discrepant terms has done some mischief. We think Louisiana, oddly enough, is in
a better position to handle the irritations of this choice of vocabulary because our theory of contract pro -
vides a more helpful explanation of the usage and indeed helps to limit it to this context alone.

[FN6] See generally C.C. arts. 2720 to 2726.

[FN7] See generally C.C. art. 2475.

[FN8] We therefore consider carrying over the use of the idea of “additional” or “different” terms of
U.C.C. § 2-207 a potentially confusing and unhelpful innovation. The civil law does not consider the par-
ties' contract blank unless they fill it in, but accepts as a matter of both principle and technique that the con -
tract does not need to specify every last possible detail of the agreement.

[FN9] C.C. art. 2601 revision comment (g).

[FN10] C.C. art. 2601 ¶2 states:

Between merchant, however, additional terms become part of the contract unless they alter the offer materially, or
the offer expressly limits the acceptance to the terms of the offer, or the offeree is notified of the offeror's objec -
tion to the additional terms within a reasonable time, in all of which cases the additional terms do not become a
part of the contract. Additional terms alter the offer materially when their nature is such that it must be presumed
that the offeror would not have contracted on those terms.

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