provision specifying New York law, that is an additional term. If the offeror’s form has a choice of law provision specifying Montana law and the offeree’s form has a provision specifying New York law, that is a different term.

Now we drop down into subsection (2) to find out whose term is going to govern when we have additional or different terms. Subsection (2) begins “the additional terms are to be construed as proposals.” Note that it doesn’t mention different terms. We will get back to different terms after we explore what happens to additional terms.

Subsection (2) says that the additional terms are proposals, so the offeree is in effect saying to the offeror, “I propose these additional terms to you.” A proposal is just that, a suggestion. The next sentence, though, says that between merchants (that is, when both parties are merchants) those proposed terms become part of the contract terms. Note, by the way, that nothing before this in § 2-207 made a distinction between merchants and non-merchants, so everything else must apply whether the parties are merchants or not. So if the offeror and offeree are both merchants, then those additional terms presumptively become part of the contract.

Unfortunately, the section doesn't tell us what happens when the exchange is not between merchants. I think we can logically imply that if between merchants the proposals presumptively become part of the contract, then between a merchant and a non-merchant they don't presumptively become part of the contract. That is, silence is not an acceptance – the proposed terms have to be affirmatively agreed to. That makes sense because merchants are held to know what they are doing so they presumptively accept the proposed terms while non-merchants have to do more to accept them. For example, a merchant responds to another merchant’s form with a form that adds a term stating “All disputes will be resolved by arbitration.” This proposed term is presumptively part of the contract. But if a merchant responds to a non-merchant’s form with a form that adds a term stating, “All disputes will be resolved by arbitration,” while the Code does not expressly address this situation, I think the most likely result is that the proposed term is not part of the contract unless the non-merchant does something to affirmatively accept it.

Okay, so between merchants the proposed additional terms in the offeree's form presumptively become part of the contract, but subsection (2) tells us there are three ways for the offeror to rebut the presumption and keep them from becoming part of the contract: (a) where the offer limits acceptance; (b) where the proposed terms are material alterations; and (c) where the offeror objects to the proposed terms on receipt of them.

The first exception in (a) is that the offer limits acceptance to the terms of the offer. This does not require language as strong as the language in subsection (1) after the comma – it does not have to say “we don't have a deal if you don't agree to my terms,” it just has to say “this offer is expressly limited to the terms of the offer.” So if the offeror put that language in the offer, then the additional terms proposed by the offeree are out.

With the exception in (c), the offeror has an opportunity to object to the additional terms at the time the form is received. That almost never happens because nobody reads the form at the time they get it. So most of the time, (c) doesn't happen.

Discussions Discussions in Contracts: UCC 2-207 2: Finding the Terms of the Contract Page 2 of 4

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