Opinion ID: 155360
Heading Depth: 2
Heading Rank: 1

Heading: Materiality of Arbitration Terms

Text: 15 Colorado has not directly addressed whether inclusion of arbitration as an additional term materially alters a contract, and thus we presume it would follow a conventional UCC analysis on this issue. Arguably, arbitration as an additional term would  'materially alter' [a contract] and thus not survive 2-207(2). 1 JAMES J. WHITE & ROBERT S. SUMMERS, UNIFORM COMMERCIAL CODE § 1-3, at 27 (4th ed.1995). However, the burden of showing that arbitration is a material alteration is on the party opposing its inclusion because section 2-207 presumes inclusion of additional terms between merchants. Comark Merchandising, Inc. v. Highland Group, Inc., 932 F.2d 1196, 1201 (7th Cir.1991). 14 16 New York does not conform to typical UCC analysis, at least with respect to the burden of proof that arbitration is a material alteration when introduced as an additional term. New York presumes that arbitration is material; the presumption effectively carries the initial burden of the party opposing arbitration as a material alteration. New York's highest court has stated that the inclusion of an arbitration agreement materially alters a contract for the sale of goods, and thus, pursuant to section 2-207 (subd. (2), par. (b)), it will not become a part of such a contract unless both parties explicitly agree to it. Marlene Indus. Corp. v. Carnac Textiles, Inc., 45 N.Y.2d 327, 408 N.Y.S.2d 410, 380 N.E.2d 239, 242 (1978). Although the proponents of arbitration as trade usage may in some limited circumstances make a sufficient showing to alter this result, 15 application of New York law in the absence of such a showing presumptively requires the conclusion that arbitration is a material alteration and thus would not become part of the Twist/Seatex contract.