Opinion ID: 564982
Heading Depth: 3
Heading Rank: 2

Heading: The box-top license as a counter-offer?

Text: 41 TSL advances two reasons why its box-top license should be considered a conditional acceptance under UCC Sec. 2-207(1). First, TSL argues that the express language of the box-top license, including the integration clause and the phrase opening this product indicates your acceptance of these terms, made TSL's acceptance expressly conditional on assent to the additional or different terms. 26 Second, TSL argues that the box-top license, by permitting return of the product within fifteen days if the purchaser 27 does not agree to the terms stated in the license (the refund offer), establishes that TSL's acceptance was conditioned on Step-Saver's assent to the terms of the box-top license, citing Monsanto Agricultural Products Co. v. Edenfield. 28 While we are not certain that a conditional acceptance analysis applies when a contract is established by performance, 29 we assume that it does and consider TSL's arguments. 42 To determine whether a writing constitutes a conditional acceptance, courts have established three tests. Because neither Georgia nor Pennsylvania has expressly adopted a test to determine when a written confirmation constitutes a conditional acceptance, we consider these three tests to determine which test the state courts would most likely apply. 30 43 Under the first test, an offeree's response is a conditional acceptance to the extent it states a term materially altering the contractual obligations solely to the disadvantage of the offeror. 31 Pennsylvania, at least, has implicitly rejected this test. In Herzog Oil Field Service, Inc., 32 a Pennsylvania Superior Court analyzed a term in a written confirmation under UCC Sec. 2-207(2), rather than as a conditional acceptance even though the term materially altered the terms of the agreement to the sole disadvantage of the offeror. 33 44 Furthermore, we note that adopting this test would conflict with the express provision of UCC Sec. 2-207(2)(b). Under Sec. 2-207(2)(b), additional terms in a written confirmation that materially alter [the contract] are construed as proposals for addition to the contract, not as conditional acceptances. 45 A second approach considers an acceptance conditional when certain key words or phrases are used, such as a written confirmation stating that the terms of the confirmation are the only ones upon which we will accept orders. 34 The third approach requires the offeree to demonstrate an unwillingness to proceed with the transaction unless the additional or different terms are included in the contract. 35 46 Although we are not certain that these last two approaches would generate differing answers, 36 we adopt the third approach for our analysis because it best reflects the understanding of commercial transactions developed in the UCC. Section 2-207 attempts to distinguish between: (1) those standard terms in a form confirmation, which the party would like a court to incorporate into the contract in the event of a dispute; and (2) the actual terms the parties understand to govern their agreement. The third test properly places the burden on the party asking a court to enforce its form to demonstrate that a particular term is a part of the parties's commercial bargain. 37 47 Using this test, it is apparent that the integration clause and the consent by opening language is not sufficient to render TSL's acceptance conditional. As other courts have recognized, 38 this type of language provides no real indication that the party is willing to forego the transaction if the additional language is not included in the contract. 48 The second provision provides a more substantial indication that TSL was willing to forego the contract if the terms of the box-top license were not accepted by Step-Saver. On its face, the box-top license states that TSL will refund the purchase price if the purchaser does not agree to the terms of the license. 39 Even with such a refund term, however, the offeree/counterofferor may be relying on the purchaser's investment in time and energy in reaching this point in the transaction to prevent the purchaser from returning the item. Because a purchaser has made a decision to buy a particular product and has actually obtained the product, the purchaser may use it despite the refund offer, regardless of the additional terms specified after the contract formed. But we need not decide whether such a refund offer could ever amount to a conditional acceptance; the undisputed evidence in this case demonstrates that the terms of the license were not sufficiently important that TSL would forego its sales to Step-Saver if TSL could not obtain Step-Saver's consent to those terms. 49 As discussed, Mr. Greebel testified that TSL assured him that the box-top license did not apply to Step-Saver, as Step-Saver was not the end user of the Multilink Advanced program. Supporting this testimony, TSL on two occasions asked Step-Saver to sign agreements that would put in formal terms the relationship between Step-Saver and TSL. Both proposed agreements contained warranty disclaimer and limitation of remedy terms similar to those contained in the box-top license. Step-Saver refused to sign the agreements; nevertheless, TSL continued to sell copies of Multilink Advanced to Step-Saver. 50 Additionally, TSL asks us to infer, based on the refund offer, that it was willing to forego its sales to Step-Saver unless Step-Saver agreed to the terms of the box-top license. Such an inference is inconsistent with the fact that both parties agree that the terms of the box-top license did not represent the parties's agreement with respect to Step-Saver's right to transfer the copies of the Multilink Advanced program. Although the box-top license prohibits the transfer, by Step-Saver, of its copies of the program, both parties agree that Step-Saver was entitled to transfer its copies to the purchasers of the Step-Saver multi-user system. Thus, TSL was willing to proceed with the transaction despite the fact that one of the terms of the box-top license was not included in the contract between TSL and Step-Saver. We see no basis in the terms of the box-top license for inferring that a reasonable offeror would understand from the refund offer that certain terms of the box-top license, such as the warranty disclaimers, were essential to TSL, while others such as the non-transferability provision were not. 51 Based on these facts, we conclude that TSL did not clearly express its unwillingness to proceed with the transactions unless its additional terms were incorporated into the parties's agreement. The box-top license did not, therefore, constitute a conditional acceptance under UCC Sec. 2-207(1). 52