Contracts Counter Offer and Additional Terms

Question 1

Contract

                      Counteroffer and Additional terms

Answer 1

Under the common law, an additional material term in a response to an offer constitutes a counteroffer. However, UCC Article 2 governs this transaction because it involves a sale of goods. Under UCC § 2-207, the presence of an additional term—the arbitration provision in the seller’s acknowledgment—did not give rise to a counteroffer. Rather, a contract was formed, and the arbitration provision constituted a proposal for an addition to the contract.