Counteroffers & UCC 2-207

Question 1

Counteroffer: CL

Answer 1

The common law applies the Mirror Image Rule; under which the terms in an acceptance must exactly match the terms of the offer. If an acceptance does not match an offer, it is deemed to be a rejection and counteroffer.

Question 2

Counteroffer: UCC 2-207

Answer 2

Under UCC 2-207, a purported accetpance that does not match the terms of the offer exactly can be treated as a valid acceptance.

Question 3

UCC 2-207: Additional Terms

Answer 3

Under UCC 2-207, if an acceptance contains additional terms, the terms of the original offer will govern, EXCEPT:

• where both parties are merchants,
• the new terms do not materially alter the agreement
• the original offer did not expressly limit acceptance to its terms, and
• the offeror does not object within a reasonable time to the new/different terms.

Question 4

UCC 2-207: Different Terms

Answer 4

The UCC does not discuss the effect of different terms and courts are split on the treatment of conflicting terms in sale-of-goods contracts.

• A MAJORITY of courts will apply the “Knock Out Rule”; under which the conflicting terms are nullified (knocked out), and the court substitutes UCC gap-filler terms.
• A MINORITY of jurisdictions treat conflicting terms like additional terms. (Acceptance terms control if: merchants, no material alteration, no express limit to offer terms, and no objection.)

Question 5

What kinds of chages to an agreement are considered material or immaterial?

Answer 5

• MATERIAL
  
  • Warranty Disclaimer
  • Quality Clause contradictory to trade usage
  • Unreasonably short time to file complaints
  • Terms that surprise or create hardship without express awareness by other party
• IMMATERIAL
  
  • Reasonable fixed time for complaints
  • Reasonable interest on late payments
  • Reasonable limitation of remedies

Question 6

UCC 2-207: Implied-in-Fact Contract

Answer 6

Under UCC 2-207, conduct by both parties which recognizeds the existence of a contract is susfficient to establish a contract for sale even where the terms in the acceptance differ from those in th offer to such a degree that a contract is not otherwise formed.

In such cases, the terms of the contract consist of the terms on which the writings of the parties agree, together with any supplementary terms incorporated under the UCC.

Question 7

Conditional Acceptance

Answer 7

A conditional acceptance is treated as a counteroffer under both the common law and the UCC.

Question 8

UCC 2-207: Written confirmations

Answer 8

Under UCC 2-207, a written confirmation of an existing verbal agreement operates as an acceptance, even if it states terms additional to or different from those agreed upon, unless acceptance is expressly made conditional upon assent to the additional or different terms.