UCC SECTION 2-207: SCHEMATIC MATERIALS

Harry M. Flechtner University of Pittsburgh School of Law

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CONSTRUCTION OF UCC ' 2-207 Chart 1: Contract Formation under ' 2-207 ADefinite and seasonable expression of AWritten confirmation@ [of a prior agreement] sent acceptance@ that Astates terms additional within a reasonable time which Astates terms to or different from those offered@ additional to or different from those [.] agreed \ upon@ \ / \ / \ / ' 2-207(1) / \ / \ ADefinite and seasonable AWritten confirmation@ (of a prior agreement) expression of acceptance | | | | | Is acceptance Aexpressly made conditional on | assent to the additional or different terms@? [1] | | \ | | \ | Yes No------------------------| | \ | | \ | Did the offeror assent to the different or additional terms \ | other than by merely performing as per the offer [3]? \ | | | \ | | | \ | No Yes \ | | | \| | | | Have the parties engaged in conduct | | that Arecognizes the existence of | | a contract@? | | | | | | | | | | | No Yes | | | | | | | | | | No contract Contract Contract Contract under 2-207(3) | under 2-207(1) [2] | | | For terms. see Terms = terms of For terms... see Chart III the counteroffer Chart II .

Chart II: Contract Terms under UCC ' 2-207(2) Additional and different terms in an expression of acceptance or written confirmation | Is term additional or different? / \ / \ Additional Different------Apply knock out rule or drop out rule or treat the term like / / an additional term [4] Are the parties both merchants? | | | | No Yes---------------Did the offer expressly limit acceptance | to the terms of the offer? | | / | | / | | Yes No | / | |------------------------------------------/ | | Would the term Amaterially alter@ the | offer/contract? | | / | | / | | Yes No | / | |------------------------------------------/ | | Did the other party give notice that it | objected to the term in advance or | within a reasonable time? | | / | | / | | Yes No | / | |--------------------------------------./ | | | Did the other party assent to the term | other than by merely performing | as per the offer/contract? | | | | | Yes No | | | | Term is part of contract Term is not part of contract Term is part of contract Contract terms are those in the offer/contract as modified under the foregoing analysis Chart III: Contract Terms under UCC ' 2-207(3) .

2-309. . . etc.. 2-308.Terms contained in the Awritings of the parties@ | | | Do Athe writings of the parties agree@ on the term? / \ / \ / \ Yes No / \ / \ / Term is part of the contract by conduct \ Term is not part of the contract by conduct A contract by conduct under UCC ' 2-207(3) consists of the terms included under the foregoing analysis plus Asupplementary terms incorporated under any other provision of this Act@ B i. Agap-filling@ terms supplied by UCC '' 2-305(1). [5] .e.

@ which is the label attached to Chart I. Thus in the written confirmation situation it is not accurate to speak of Acontract formation under ' 2-207. 4. but upon reconsideration was found not to trigger that proviso: AAcceptance of this order is expressly limited to the conditions of purchase printed on the reverse side. concluding that the subsection applies only to additional terms. AAcceptance is predicated on the following clarifications. Written confirmations are included in Chart I only because they Aflow through@ ' 2-207(1) into ' 2-207(2). even if that language appears in pre-printed boilerplate. Courts have held that a definite and seasonable expression of acceptance containing additional or difference terms will not operate as an acceptance under ' 2-207(1) if it contains language that triggers the proviso at the end of the subsection. whether the additional or different terms contained in the written confirmation become part of the [pre-existing] contract. a contract exists. and most courts.e. Under .g. and thus to prevent the response (provided it contains at least one additional or different term) from operating as an acceptance of the offer: AOur acceptance is expressly conditioned on your assent to the additional or different terms set forth below and printed on the reverse side@.. the following clauses have been found not to track the language of the ' 2-207(1) proviso closely enough. v.e. Nevertheless.2d 1228 (7th Cir 1977). In class I called language sufficient to trigger the ' 2-207(1) provision (language that must.. but not by virtue of ' 2-207. but only for the purpose of determining. Those who adopt this position have developed two competing views concerning the results when expressions of acceptance (if they do not contain the Amagic language@ and thus operate as acceptances under ' 2-207(1)) contain Adifferent@ terms.NOTES 1. Jordan Int=al Co. and thus not to be Amagic language@ that prevented the non-matching response from operating as an acceptance: AOur acceptance is subject to the additional or different terms set forth below and printed on the reverse side@. AOur acceptance of the order is conditional on the buyer=s acceptance of the conditions of sale printed on the reverse side hereof@. Where there is a written confirmation of a prior agreement (and the written confirmation includes terms additional to or different from those in the prior agreement). Read literally. to make the response Aexpressly conditional on assent to the additional or different terms@ within the meaning of the proviso at the end of ' 2-207(1).@ The following clauses have been held to constitute Amagic language@ B i. by applying ' 2-207(2).@ The following response was. ' 2-207 applies to written confirmations B not for the purpose of determining contract formation (the primary focus of ' 2-207(1)). E.. ' 2-207(2) does not apply to different terms. C Itoh & Co. incidentally.@ On the other hand. appear in a response to an offer rather than in the original offer in order to have this effect) Amagic language. a Adefinite and seasonable expression of acceptance@ containing additional or different terms where Aacceptance is expressly made conditional on assent to the additional or different terms@). held to constitute Amagic language@ that triggered the proviso at the end of ' 2-207. in situations falling within the final clause of ' 2-207(1) (i.@ 2. It is generally held that. additions or modifications to the order. AAcceptance of this order shall be deemed to constitute an agreement to the conditions named hereon and supersedes all previous agreements. Many commentators. at first. take this literally. and not to different terms. a buyer who made the original offer will not be deemed to have accepted the terms of the seller=s response just because the buyer has accepted the goods shipped by the seller. 552 F. 3..

See JAMES J.@ however. WHITE AND ROBERT S.the most widely accepted view. differing terms in an offer and an expression of acceptance knock each other out of the contract (the Aknock-out@ view). 5. C. so that neither party=s term remains in the contract (thus leaving silence or a Agap@ that may possibly be filled by referring to the Agap-filling@ provisions of UCC Article 2).. Jordan Int=al Co. Is the seller=s disclaimer an Aadditional@ or a Adifferent@ term? It is Aadditional@ in the sense that the offer was silent concerning warranties. alternatively (in a view not so widely shared by courts). 2000). and 3) the difficulty of distinguishing between additional and different terms. by not mentioning merchantability. consider a buyer=s offer to purchase goods from a merchant in goods of the kind. . SUMMERS. the buyer=s offer silently included the implied warranty of merchantability. Other commentators have suggested that the failure to mention different terms in ' 2-207(2) was a mere printer=s error that should be ignored. It is Adifferent. 2) the absurdity of treating different and additional terms differently. in the sense that. 552 F. If the offer says nothing about warranties. and the offeror=s original term remains in the contract. and the seller=s term would change that. Itoh & Co. and thus the seller=s term does not conflict with any express term of the offer. 1977).2d 1228 (7th Cir. a term in an expression of acceptance which differs from a term in the offer Afalls out@ or Adrops out@ (what I called the Adrop out@ view). v. As an example of the last point. UNIFORM COMMERCIAL CODE '1-3 at 34-36 (5th ed. They support this view by citing 1) language in comment 3 to ' 2-207 which suggests that subsection (2) covers both additional and different terms. a warranty that the goods are merchantable is implied (see UCC ' 2-314). The seller responds with a Adefinite and seasonable expression of acceptance@ (without the Amagic language@) that includes an effective disclaimer of the implied warranty of merchantability (see UCC ' 2-316(2)).

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