# U.C.C. § 2-207 2: Finding the Terms of the Contract

Welcome to this podcast on U.C.C. § 2-207 Finding the Terms of the Contract brought to you by CALI. I am Professor Scott J. Burnham. This is the second in a series of podcasts about § 2-207 of the Uniform Commercial Code, a section often referred to as the Battle of the Forms. The first podcast covered Formation of the Contract. It would probably be helpful to listen to that one before listening to this one. The third podcast covers Written Confirmations.

The topic of this podcast is finding the terms of the contract under U.C.C. § 2-207. Remember that Article 2 of the U.C.C. applies to transactions in goods, so this section only applies to the sale of goods, which is defined as things that are moveable. Section 2-207 is a complex part of the statute and I'm not going to do it justice in a short podcast. For further study, I recommend the White and Summers treatise on the Uniform Commercial Code.

It will be helpful for you to have a copy of § 2-207 in front of you for this discussion, but please don’t look at it if you are driving! One thing I want to do is distinguish between the areas where it is clear what the statute tells us to do and the areas where we have to speculate.

To solve a 2-207 problem, you have to first identify which party is the offeror and which is the offeree. The process of entering into a contract for the sale of goods can start with either party as offeror, but let’s suppose a buyer submits an offer on a preprinted purchase order form to a seller. The seller checks the essential terms of the buyer’s order form – by that I mean what are sometimes called the “dickered” terms that vary from one transaction to another – things like the description of the goods, the quantity, price, and shipping arrangements. The seller then mirrors those essential terms in its preprinted acknowledgment form, which it sends to the buyer. The seller ships the goods and the buyer pays for them. Everyone is happy until the goods break down. The buyer then points to the favorable warranty terms on the back of its order form. The seller points to the unfavorable warranty terms on the back of its acknowledgment form. Whose terms govern?

We are assuming here that the essential terms are the same in both contracts. We are also assuming that neither party has put language in the contract that makes acceptance conditional on acceptance of the additional or different terms. In either of those situations, as explained in the first podcast, the forms might not form a contract.

Subsection (1) of the statute tells us that the responding form is an acceptance “even though it states terms additional to or different from those offered.” Notice the dramatic change from the common law. Under the rule of § 2-207, if the response of the offeree contains additional or different terms, it is not a counter-offer, but an acceptance! We undoubtedly have consideration since the parties have agreed to sell certain goods for a certain price. And, if we have an offer and an acceptance and consideration, then the parties have formed a contract.

But that doesn’t make a lot of sense. We have two forms (a buyer’s and a seller’s) that result in a contract, but the terms on the forms are not the same. So, now we have to find which of those terms become the terms of the contract formed by the parties. Let’s first explain what the statute means by “additional” or “different” terms. The idea is that an additional term addresses a subject that is not mentioned in the offer, while a different term addresses a subject that is mentioned in the offer, but is different substantively. For example, if the offeror’s form is silent on choice of law, and the offeree’s form has a

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