Opinion ID: 769029
Heading Depth: 3
Heading Rank: 2

Heading: Materiality and Per Se Materiality.

Text: 31 A material alteration is one that would result in surprise or hardship if incorporated without express awareness by the other party. N.Y. U.C.C. § 2 207 cmt. 4 (emphasis added). 32 Certain additional terms are deemed material as a matter of law. For example, an arbitration clause is per se a material alteration in New York because New York law requires an express agreement to commit disputes to arbitration. See Marlene Indus. v. Carnac Textiles, Inc., 408 N.Y.S.2d 410, 413 (1978); see also N.Y. U.C.C. § 2-207 cmt. 4 (listing as examples of per se material alterations, inter alia, waivers of warranties of merchantability or fitness for a particular purpose and clauses granting the seller the power to cancel upon the buyer's failure to meet any invoice). OMT characterizes the Tax Clause as a broad-ranging indemnity clause, and analogizes it to these per se material alterations. We reject the analogy. The Tax Clause allocates responsibility for the tax payable on a specific sale of goods. See Union Carbide Corp. v. Oscar Mayer Foods Corp., 947 F.2d 1333, 1335, 1337 (7th Cir. 1991) (distinguishing between open-ended tax liability, which is a material alteration, from responsibility for taxes shown on an individual invoice, which is not). And unlike an arbitration clause, which waives a range of rights that are solicitously protected, the Tax Clause is limited, discrete and the subject of no special protection. Unable to show that the Tax Clause is a material alteration per se, OMT must prove that in this case the Tax Clause resulted in surprise or hardship. 3 33