ARTICLE 1 + ARTICLE 2:
I.) THE CONTRACTUAL AGREEMENT
1.) Battle of the Forms
A.) 2-207: Additional Terms in Acceptance or Confirmation
2.) Statute of Frauds
A.) 2-201: Formal Requirements; Statute of Frauds
3.) Terms Supplied by Express Agreement of the Parties and Terms Supplied by Course of Dealing, Usage of Trade, and Course of Performance
A.) 1-102: Purposes; Rules of Construction; Variation by Agreement
B.) 1-205(1): Course of Dealing
C.) 1-205(2): Usage of Trade
D.) 2-208: Course of Performance
1.) BATTLE OF THE FORMS
A.) 2-207: Additional Terms in Acceptance or Confirmation
(1) A definite and seasonable expression of acceptance or a written confirmation which is sent within a reasonable time operates as an acceptance even though it states terms additional to or different from those offered or agreed upon, unless acceptance is expressly made conditional on assent to the additional or different terms.
(2) The additional (or different) terms are to be construed as proposals for addition to the contract. Between merchants such terms become part of the contract unless:
-a.) the offer expressly limits acceptance to the terms of the offer;
-b.) they materially alter it; or
-c.) notification of objection to them has already been given or is given within a reasonable time after notice of them is received.
(3) Conduct by both parties which recognizes the existence of a contract is sufficient to establish a contract for sale although the writings of the parties do not otherwise establish a contract. In such case the terms of the particular contract consist of those terms on which the writings of the parties agree, together with any supplementary terms incorporated under any other provision of this Act.
COMMENTS:
-Ask two questions: 1.) Is there a contract? 2.) If so, what are its terms?
-(1)+(2) Operate as a Unit. (3) works by itself.
-BUT NOTE: If the offeree proposes additional terms that do not conflict, “it is both fair and commercially sound to assume that their inclusion has been assented to.”
1.) IS THERE A CONTRACT?
-Under (1) up to the comma: there is a contract when the offeree makes, “a definite and seasonable expression of acceptance or a written confirmation which is sent within a reasonable time.” This operates as an acceptance even though it may “state terms additional to or different from those agreed upon.”
-Under (1) after the comma (Unless): If the offeree sends a form that contains expressly conditional language, then technically, no contract has been formed. The offeree has made a counter-offer. If this is the case, we should proceed to (3).
-(3) states that “conduct by both parties which recognizes the existence of a contract is sufficient to establish a contract for sale although the writings of the parties do not otherwise establish a contract.”
-So, under (3), we DO have a contract if the parties perform (conduct).
2.) WHAT ARE ITS TERMS?
-If we have a contract under (1): (meaning that the terms expressed by the offeree are additional to or different) then we should proceed to (2).
-For the purposes of the exam, we should focus on (b). This section states that those additional or different terms should be struck from the contract if, “they materially alter it.” What does materially alter mean?
-Comment 4 states, “Examples of typical clauses which would normally ‘materially alter’ the contract and so result in surprise or hardship if incorporated without express awareness by the other party are: a clause negating such standard warranties as that of merchantability or fitness for a particular purpose in circumstances in which either warranty normally attaches; a clause requiring a guaranty of 90% or 100% deliveries in a case such as a contract by cannery, where the usage of the trade allows greater quality leeways; a clause reserving to the seller the power to cancel upon the buyer’s failure to meet any invoice when due; a clause requiring that complaints be made in a time materially shorter than customary or reasonable.”
-ADDITIONALLY: course of performance, course of dealing, and usage or trade may determine w
atterson, 3 questions we should ask if confronted with a SOF question:
1.) Are you within the statute?
a.) Can the contract be preformed within 1 year (common law)?
b.) Is the contract under $5,000?
2.) Is there a writing?
3.) If there is no writing, is there an exception? (2-201(2) or (3))
a.) Satisfying the Statute With a Writing (2-201(1))
-to satisfy the statute with a writing, a party need only:
1.) produce a writing
2.) that shows a contract has been made
3.) signed by the party to be charged, which
4.)recites a quantity term.
-It makes no difference that the writing omits or incorrectly states a term agreed upon.
-under “3.)” (above), question as to what counts as a signature: The Code expressly demoralizes the signature requirement. Even a letterhead will do provided it authenticates the writing.
-“4.)” (above): “It must state a quantity term, but not a price term and if that quantity term proves lower than the quantity actually agreed upon as shown in oral proof, the contract will be enforceable only to the extent of the quantity specified in the writing.”
-“futuristic” language in the memo disqualifies a memo. To illustrate: in one instance the memo concluded with the language: ‘It is our intention to award you a contract.’ In another, the writing recited, ‘tentative deposit on tentative purchase.’
-The memo must indicate the consummation of a contract, NOT mere negotiations, not a mere offer, nor a counteroffer, nor a rejection or other non-acceptance. Also, if it can be shown that a writing is merely preliminary to a formal document required before contract formation, such a writing cannot suffice.”
