Court Opinion

ID: 2964668
Source: CourtListenerOpinion
Date Created: 2015-09-21 21:29:11.334469+00
Date Added: 2024-06-11T11:42:59.471274
License: Public Domain

USCA1 Opinion

	

                            UNITED STATES COURT OF APPEALS
                                FOR THE FIRST CIRCUIT

                                 ____________________

          No. 96-1554

                                    IONICS, INC.,
                                Plaintiff - Appellee,

                                          v.

                                ELMWOOD SENSORS, INC.,
                                Defendant - Appellant.

                                 ____________________

                                     ERRATA SHEET

               The opinion of this court issued on April 8, 1997 is amended
          as follows:

               Page 9, line 15 change "Roto-Lith's" to "Bartlett's"

               Page 12, line 8 insert period between "(1)" and footnote "5"

                            UNITED STATES COURT OF APPEALS
                                FOR THE FIRST CIRCUIT
                                 ____________________

          No. 96-1554

                                    IONICS, INC.,

                                Plaintiff - Appellee,

                                          v.

                                ELMWOOD SENSORS, INC.,

                                Defendant - Appellant.

                                 ____________________

                     APPEAL FROM THE UNITED STATES DISTRICT COURT

                          FOR THE DISTRICT OF MASSACHUSETTS

                 [Hon. Morris E. Lasker,* Senior U.S. District Judge]
                                          __________________________

                                 ____________________

                                        Before

                               Torruella, Chief Judge,
                                          ___________

                            Bownes, Senior Circuit Judge,
                                    ____________________

                              and Stahl, Circuit Judge.
                                         _____________

                                _____________________

               Daryl J. Lapp, with whom Thane D. Scott, Stephen L. Coco and
               _____________            ______________  _______________
          Palmer & Dodge LLP were on brief for appellant.
          __________________
               Tina  M.  Traficanti,  with  whom  Anthony  M.  Doniger  and
               ____________________               ____________________
          Sugarman, Rogers,  Barshak  &  Cohen,  P.C.  were  on  brief  for
          ___________________________________________
          appellee.

                                 ____________________

                                    April 8, 1997
                                 ____________________

                              
          ____________________

          *  Of the Southern District of New York, sitting by designation.

                    TORRUELLA,   Chief  Judge.    Ionics,  Inc.  ("Ionics")
                    TORRUELLA,   Chief  Judge.
                                 ____________

          purchased thermostats from Elmwood  Sensors, Inc. ("Elmwood") for

          installation  in  water dispensers  manufactured  by  the former.

          Several  of  the  dispensers  subsequently  caused   fires  which

          allegedly  resulted from defects  in the  sensors.   Ionics filed

          suit  against Elmwood in order  to recover costs  incurred in the

          wake  of  the fires.   Before  trial,  the district  court denied

          Elmwood's  motion for  partial  summary judgment.   The  District

          Court of Massachusetts subsequently  certified to this court "the

          question whether, in the  circumstances of this case,    2-207 of

          M.G.L. c. 106 has been properly applied."   Order of the district

          court, November 6, 1995.

                                I.  Standard of Review
                                I.  Standard of Review

                    We  review the grant  or denial of  summary judgment de
                                                                         __

          novo.  See Borschow  Hosp. & Medical Supplies v.  C sar Castillo,
          ____   ___ __________________________________     _______________

          Inc., 96 F.3d 10, 14 (1st Cir. 1996).
          ____

                                   II.  Background
                                   II.  Background

                    The  facts of  the case  are not  in dispute.   Elmwood

          manufactures and sells  thermostats.  Ionics  makes hot and  cold

          water dispensers, which  it leases  to its customers.   On  three

          separate occasions, Ionics purchased thermostats from Elmwood for

          use in its water dispensers.1  Every  time Ionics made a purchase

          of  thermostats from Elmwood, it sent the latter a purchase order

          form which  contained, in small  type, various "conditions."   Of

          the20 conditions onthe order form,two areof particular relevance:
                              
          ____________________

          1  Orders were placed in March, June, and September 1990.

                                         -2-

                      18.    REMEDIES -- The  remedies provided
                      Buyer herein shall  be cumulative, and in
                      addition to any  other remedies  provided
                      by law or equity.   A waiver of  a breach
                      of   any   provision  hereof   shall  not
                      constitute a waiver of any  other breach.
                      The  laws of the  state shown  in Buyer's
                      address printed  on the masthead  of this
                      order  shall  apply  in the  construction
                      hereof.

                      19.    ACCEPTANCE  --  Acceptance  by the
                      Seller of  this order  shall be upon  the
                      terms and conditions set forth in items 1
                      to  17 inclusive,  and elsewhere  in this
                      order.   Said  order  can be  so accepted
                      only on  the exact  terms herein  and set
                      forth.  No terms  which are in any manner
                      additional  to  or  different from  those
                      herein set  forth shall become a part of,
                      alter or in any way control the terms and
                      conditions herein set forth.

                    Near  the time when  Ionics placed its  first order, it

          sent Elmwood a letter that it  sends to all of its new suppliers.

          The letter states, in part:

                      The   information   preprinted,   written
                      and/or  typed  on our  purchase  order is
                      especially important  to us.   Should you
                      take   exception  to   this  information,
                      please  clearly express  any reservations
                      to us in writing.  If you do not, we will
                      assume  that  you  have  agreed   to  the
                      specified terms and that you will fulfill
                      your   obligations   according   to   our
                      purchase  order.   If necessary,  we will
                      change  your invoice and pay your invoice
                      according to our purchase order.

                    Following receipt  of each order, Elmwood  prepared and

          sent an  "Acknowledgment" form containing the  following language

          in small type:

                      THIS WILL ACKNOWLEDGE RECEIPT  OF BUYER'S
                      ORDER AND STATE  SELLER'S WILLINGNESS  TO
                      SELL THE GOODS ORDERED BUT ONLY UPON  THE
                      TERMS AND CONDITIONS SET FORTH HEREIN AND

                                         -3-

                      ON   THE   REVERSE  SIDE   HEREOF   AS  A
                      COUNTEROFFER.   BUYER SHALL BE  DEEMED TO
                      HAVE ACCEPTED SUCH COUNTEROFFER UNLESS IT
                      IS  REJECTED IN  WRITING WITHIN  TEN (10)
                      DAYS  OF  THE  RECEIPT  HEREOF,  AND  ALL
                      SUBSEQUENT  ACTION  SHALL BE  PURSUANT TO
                      THE   TERMS   AND   CONDITIONS  OF   THIS
                      COUNTEROFFER  ONLY;   ANY  ADDITIONAL  OR
                      DIFFERENT  TERMS  ARE HEREBY  OBJECTED TO
                      AND SHALL NOT BE BINDING UPON THE PARTIES
                      UNLESS SPECIFICALLY AGREED TO  IN WRITING
                      BY SELLER.

                    Although  this passage refers  to a  "counteroffer," we

          wish to emphasize  that this  language is not  controlling.   The

          form   on   which   the   language   appears   is   labelled   an

          "Acknowledgment"  and the  language  comes under  a heading  that

          reads "Notice of Receipt of Order."  The form, taken  as a whole,

          appears  to contemplate  an order's  confirmation rather  than an

          order's rejection in the form of a counteroffer.

                    It  is undisputed that  the Acknowledgment was received

          prior  to the  arrival of  the shipment  of goods.   Although the

          district court,  in its ruling  on the  summary judgment  motion,

          states that "with each  shipment of thermostats, Elmwood included

          an Acknowledgment Form," Order of the District  Court, August 23,

          1995, this statement cannot  reasonably be taken as a  finding in

          support of the  claim that  the Acknowledgment  and the  shipment

          arrived together.   First, in its certification order,  the court

          states that "[t]he purchaser, after receiving the Acknowledgment,
                                        _____

          accepted  delivery  of  the  goods  without  objection."    Order

          Pursuant to 28 U.S.C.    1292(b), Nov. 6, 1995  (emphasis added).

          This  language is  clearer  and more  precise  than the  previous

          statement and suggests that  the former was simply a  poor choice

                                         -4-

          of phrasing.   Furthermore, Ionics has  not disputed the  arrival

          time  of the  Acknowledgment.   In its  Memorandum in  Support of

          Defendant's Motion for  Partial Summary Judgment Elmwood  stated,

          under the heading  of "Statements of Undisputed Facts," that "for

          each  of the  three  orders, Ionics  received the  Acknowledgment

          prior to receiving the  shipment of thermostats."  Memorandum  in

          Support of Defendant's Motion for Partial Summary Judgment, at 3.

          In  its own memorandum, Ionics argued that there existed disputed

          issues of material  fact, but did not  contradict Elmwood's claim

          regarding  the   arrival  of   the  Acknowledgment  Form.     See
                                                                        ___

          Plaintiff's  Memorandum   in   Support  of   its  Opposition   to

          Defendant's  Motion   for  Partial  Summary   Judgment  at  4-10.

          Furthermore,  in its appellate brief,  Ionics does not argue that

          the time of  arrival of  the Acknowledgment Form  is in  dispute.

          Ionics  repeats  language  from   the  district  court's  summary

          judgment ruling that "with  each shipment of thermostats, Elmwood

          included an Acknowledgment Form," Appellee's Brief at 7, but does

          not argue that the issue  is in dispute or confront  the language

          in Elmwood's brief which states that "[i]t is undisputed that for

          each  of the  three  orders, Ionics  received the  Acknowledgment

          prior  to receiving  the shipment  of thermostats."   Appellant's

          Brief at 6.

                    As  we have  noted, the  Acknowledgment Form  expressed

          Elmwood's  willingness  to   sell  thermostats   on  "terms   and

          conditions" that the  Form indicated were  listed on the  reverse

                                         -5-

          side.  Among the terms and conditions listed on the  back was the

          following:

                      9. WARRANTY
                         All  goods   manufactured  by  Elmwood
                      Sensors, Inc. are  guaranteed to be  free
                      of  defects  in material  and workmanship
                      for a  period of ninety  (90) days  after
                      receipt  of  such   goods  by  Buyer   or
                      eighteen   months   from   the  date   of
                      manufacturer [sic] (as  evidenced by  the
                      manufacturer's   date   code),  whichever
                      shall be  longer.   THERE  IS NO  IMPLIED
                      WARRANTY OF MERCHANTABILITY AND  NO OTHER
                      WARRANTY,  EXPRESSED  OR IMPLIED,  EXCEPT
                      SUCH  AS IS  EXPRESSLY SET  FORTH HEREIN.
                      SELLER   WILL  NOT  BE   LIABLE  FOR  ANY
                      GENERAL,   CONSEQUENTIAL   OR  INCIDENTAL
                      DAMAGES, INCLUDING WITHOUT LIMITATION ANY
                      DAMAGES  FROM LOSS  OF PROFITS,  FROM ANY
                      BREACH  OF  WARRANTY  OR FOR  NEGLIGENCE,
                      SELLER'S LIABILITY  AND BUYER'S EXCLUSIVE
                      REMEDY  BEING  EXPRESSLY  LIMITED TO  THE
                      REPAIR  OF  DEFECTIVE  GOODS  F.O.B.  THE
                      SHIPPING  POINT  INDICATED  ON  THE  FACE
                      HEREOF  OR THE REPAYMENT  OF THE PURCHASE
                      PRICE UPON THE RETURN OF THE GOODS OR THE
                      GRANTING  OF  A  REASONABLE ALLOWANCE  ON
                      ACCOUNT OF  ANY  DEFECTS, AS  SELLER  MAY
                      ELECT.

                    Neither party  disputes that they entered  into a valid

          contract  and  neither  disputes  the  quantity   of  thermostats

          purchased,  the price paid, or  the manner and  time of delivery.

          The only issue in dispute is the extent of Elmwood's liability.

                    In  summary, Ionics'  order  included language  stating

          that  the contract  would be  governed exclusively  by  the terms

          included  on the purchase  order and that  all remedies available

          under state law would  be available to Ionics.   In a  subsequent

          letter, Ionics added that Elmwood must indicate any objections to

          these  conditions in writing.   Elmwood, in turn,  sent Ionics an

                                         -6-

          Acknowledgment stating that the contract was governed exclusively

          by the terms in the Acknowledgment, and Ionics was given ten days

          to reject this "counteroffer."   Among the terms included  in the

          Acknowledgment is a  limitation on Elmwood's  liability.  As  the

          district court  stated, "the  terms are diametrically  opposed to

          each other on the issue of whether all warranties  implied by law

          were  reserved or waived."   Order of the  District Court, August

          23, 1995.

                    We face, therefore,  a battle  of the forms.   This  is

          purely a  question of  law.   The dispute  turns  on whether  the

          contract is governed  by the  language after  the comma  in    2-

          207(1) of the Uniform Commercial Code, according to the rule laid

          down by this court in Roto-Lith, Ltd. v. F.P. Bartlett & Co., 297
                                _______________    ___________________

          F.2d 497 (1st Cir. 1962), or whether it is governed by subsection

          (3) of  the Code  provision, as  enacted  by both  Massachusetts,

          Mass.  Gen. L. ch. 106,   2-207  (1990 and 1996 Supp.), and Rhode

          Island, R.I. Gen. Laws    6A-2-207 (1992).2  We find the  rule of

          Roto-Lith  to be in conflict  with the purposes  of section 2-207
          _________

          and, accordingly, we overrule  Roto-Lith and find that subsection
                                         _________

          (3) governs the contract.3   Analyzing the case under  section 2-
                              
          ____________________

            There  is   some  uncertainty   on  the  question   of  whether
          Massachusetts or Rhode Island  law governs.  We need  not address
          this issue, however, because the two states have adopted versions
          of  section  2-207  of  the  Uniform  Commercial  Code  that  are
          virtually equivalent.

            Although panel  decisions of this court  are ordinarily binding
          on  newly  constituted  panels,  that  rule does  not  obtain  in
          instances where, as here, a departure is compelled by controlling
          authority  (such as  the interpreted  statute  itself).   In such
          relatively rare instances, we  have sometimes chosen to circulate

                                         -7-

          207, we conclude that Ionics defeats Elmwood's motion for partial

          summary judgment.

                                 III.  Legal Analysis
                                 III.  Legal Analysis

                    Our analysis  begins with  the statute.   Section 2-207

          reads as follows:

                        2-207.   Additional Terms in Acceptance
                      or Confirmation

                      (1)  A definite and seasonable expression
                      of acceptance or  a written  confirmation
                      which  is sent  within a  reasonable time
                      operates as an  acceptance even though it
                      states terms additional  to or  different
                      from those offered or agreed upon, unless
                      acceptance is  expressly made conditional
                      on assent to the additional  or different
                      terms.

                      (2)   The  additional or  different terms
                      are  to be  construed  as  proposals  for
                      addition  to  the   contract.     Between
                      merchants  such terms become  part of the
                      contract unless:
                         (a)    the  offer expressly  limits
                         acceptance  to  the  terms  of  the
                         offer;
                         (b)  they materially alter it; or
                         (c)  notification  of objection  to
                         them has already  been given or  is
                         given  within   a  reasonable  time
                         after notice of them is received. 

                      (3)    Conduct   by  both  parties  which
                      recognizes the existence of a contract is
                              
          ____________________

          the  proposed overruling  opinion to  all  active members  of the
          court  prior  to publication  even  though the  need  to overrule
          precedent is reasonably clear.  See, e.g., Wright v. Park, 5 F.3d
                                          ___  ____  ______    ____
          586, 591 n.7 (1st  Cir. 1994); Trailer Marine Transport  Corp. v.
                                         _______________________________
          Rivera  V zquez,  977  F.2d  1, 9  n.5  (1st  Cir.  1992).   This
          _______________
          procedure  is,  of  course, informal,  and  does  not  preclude a
          suggestion of rehearing  en banc on any issue.   We have followed
          that praxis here and can report that none of the active judges of
          this  court  has  objected to  the  panel's  analysis  or to  its
          conclusion that Roto-Lith has  outlived its usefulness as circuit
                          _________
          precedent.

                                         -8-

                      sufficient  to  establish a  contract for
                      sale although the writings of the parties
                      do  not  otherwise establish  a contract.
                      In  such case the terms of the particular
                      contract consist of  those terms on which
                      the  writings  of   the  parties   agree,
                      together  with  any  supplementary  terms
                      incorporated  under any  other provisions
                      of this chapter.

          Mass. Gen. L. ch. 106,   2-207 (1990 and 1996 Supp.).

                    In  Roto-Lith,  Roto-Lith  sent  a  purchase  order  to
                        _________

          Bartlett,  who responded  with  an  acknowledgment that  included

          language purporting to limit Bartlett's liability.  Roto-Lith did

          not object.  Roto-Lith, 297 F.2d at 498-99.  This court held that
                       _________

          "a  response which  states  a condition  materially altering  the

          obligation solely  to  the  disadvantage  of the  offeror  is  an

          'acceptance * * *  expressly * * * conditional  on assent to  the

          additional *  * * terms.'"   Id. at 500.   This holding  took the
                                       ___

          case outside of section 2-207 by applying the exception after the

          comma in subsection  (1).  The court then reverted  to common law

          and concluded  that Roto-Lith "accepted the  goods with knowledge

          of the  conditions specified in the  acknowledgment [and thereby]

          became bound."  Id. at 500.  In other words,  the Roto-Lith court
                          ___                               _________

          concluded  that  the defendant's  acceptance  was conditional  on

          assent,   by  the  buyer,  to  the   new  terms  and,  therefore,

          constituted  a counter  offer rather  than an  acceptance.   When

          Roto-Lith  accepted  the  goods   with  knowledge  of  Bartlett's

          conditions,  it  accepted the  counteroffer and  Bartlett's terms

          governed the contract.  Elmwood argues that Roto-Lith governs the
                                                      _________

                                         -9-

          instant   appeal,   implying   that  the   terms   of   Elmwood's

          acknowledgment govern.

                    Ionics claims that the instant  case is distinguishable

          because  in Roto-Lith "the  seller's language limiting warranties
                      _________

          implied  at law was  proposed as an  addition to, but  was not in

          conflict  with, the explicit terms of  the buyer's form.  [In the

          instant case] the explicit  terms of the parties'  forms conflict

          with and reject each other."  Appellee's Brief at 21.

                    We do  not believe  that Ionics'  position sufficiently

          distinguishes  Roto-Lith.   It  would  be  artificial to  enforce
                         _________

          language  that  conflicts  with  background  legal   rules  while

          refusing  to enforce  language  that conflicts  with the  express

          terms  of the contract.  Every contract is assumed to incorporate

          the existing legal norms that  are in place.  It is  not required

          that every contract explicitly spell out the governing law of the

          jurisdiction.  Allowing  later forms  to govern  with respect  to

          deviations  from the background rules but not deviations from the

          terms in  the contract  would imply  that only the  terms in  the

          contract  could be relied upon.   Aside from  being an artificial

          and arbitrary distinction, such a  standard would, no doubt, lead

          parties  to include more of the background rules in their initial

          forms, making forms  longer and more  complicated.  Longer  forms

          would  be more difficult and  time consuming to  read -- implying

          that  even  fewer forms  would be  read  than under  the existing

          rules.  It is the failure of  firms to read their forms that  has

                                         -10-

          brought this case before us, and we do not wish  to engender more

          of this type of litigation.

                    Our inquiry,  however, is  not complete.   Having found

          that we cannot distinguish  this case from Roto-Lith, we  turn to
                                                     _________

          the Uniform  Commercial  Code, quoted  above.   A plain  language

          reading of section 2-207 suggests that subsection (3) governs the

          instant  case.   Ionics sent  an initial  offer to  which Elmwood

          responded with its "Acknowledgment."   Thereafter, the conduct of

          the parties established  the existence of a  contract as required

          by section 2-207(3).

                    Furthermore,  the case before  us is squarely addressed

          in comment 6, which states:

                      6.   If  no answer  is received  within a
                      reasonable  time  after additional  terms
                      are   proposed,  it  is   both  fair  and
                      commercially sound to  assume that  their
                      inclusion  has been  assented to.   Where
                      clauses on confirming forms sent  by both
                      parties  conflict[,]  each party  must be
                      assumed  to  object to  a  clause of  the
                      other   conflicting   with  one   on  the
                      confirmation  sent  by  himself.    As  a
                      result[,] the requirement  that there  be
                      notice of  objection  which is  found  in
                      subsection  (2) [of   2-207] is satisfied
                      and the  conflicting terms do  not become
                      part  of the contract.  The contract then
                      consists   of    the   terms   originally
                      expressly agreed  to, terms on  which the
                      confirmations  agree, and  terms supplied
                      by this Act.

          Mass. Gen. L. ch.  106,   2-207, Uniform Commercial  Code Comment

          6.  This  Comment addresses  precisely the facts  of the  instant

          case.   Any  attempt at  distinguishing the  case before  us from

          section 2-207 strikes us as disingenuous.

                                         -11-

                    We are faced, therefore, with a contradiction between a

          clear precedent of this court, Roto-Lith, which suggests that the
                                         _________

          language after the comma in subsection (1) governs, and the clear

          dictates  of the  Uniform  Commercial Code,  which indicate  that

          subsection (3) governs.  It  is our view that the two  cannot co-

          exist and  the case at  bar offers a graphic  illustration of the

          conflict.   We  have, therefore,  no choice  but to  overrule our

          previous  decision in Roto-Lith, Ltd. v. F.P. Bartlett & Co., 297
                                _______________    ___________________

          F.2d 497 (1st  Cir. 1962).   Our decision brings this  circuit in

          line with the  majority view on  the subject and  puts to rest  a

          case  that has  provoked considerable  criticism from  courts and

          commentators and alike.4

                     We  hold, consistent  with section 2-207  and Official

          Comment 6, that where  the terms in two forms  are contradictory,

          each  party is assumed to object to the other party's conflicting

          clause.   As a result, mere acceptance  of the goods by the buyer

          is  insufficient to infer consent to the seller's terms under the

          language of  subsection (1).5  Nor  do such terms  become part of
                              
          ____________________

            See, e.g.,  Step-Saver Data  Systems, Inc. v.  Wyse Technology,
            ___  ____   ______________________________     _______________
          939 F.2d  91, 101 (3d Cir.  1991); St. Charles Cable  TV, Inc. v.
                                             ___________________________
          Eagle  Comtronics, Inc., 687 F.  Supp. 820, 828  & n.19 (S.D.N.Y.
          _______________________
          1988); Daitom  v. Pennwalt Corp.,  741 F.2d  1569, 1576-77  (10th
                _______     ______________
          Cir. 1984); Luria Bros. v. Pietlet  Bros. Scrap Iron & Metal, 600
                      ___________    _________________________________
          F.2d 103, 113 (7th Cir. 1979); Dorton  v. Collins & Aikman Corp.,
                                         ______     ______________________
          453 F.2d 1161,  1168 & n.5 (6th Cir. 1972);   ;  James J. White &
          Robert S. Summers, 1 Uniform Commercial Code,   1-3, at 12, 16-17
          (1995); Murray, Intention over Terms: An Exploration of UCC 2-207
          &  New Section 60, Restatement  of Contracts, 37  Fordham L. Rev.
          317, 329 (1969).

            See  also  Official Comment  3  ("If  [additional or  different
            _________
          terms] are such as materially to alter the original bargain, they
          will  not be  included unless  expressly agreed  to by  the other

                                         -12-

          the  contract  under  subsection   (2)  because  notification  of

          objection has  been given  by the  conflicting forms.   See    2-
                                                                  ___

          207(2)(c).

                    The   alternative  result,  advocated  by  Elmwood  and

          consistent with Roto-Lith, would undermine the role of section 2-
                          _________

          207.   Elmwood  suggests that  "a seller's  expressly conditional

          acknowledgment  constitutes  a counteroffer  where  it materially

          alters  the terms proposed by  the buyer, and  the seller's terms

          govern the  contract between the  parties when the  buyer accepts

          and pays  for the goods."   Appellant's Brief at 12.   Under this

          view, section 2-207 would no longer apply to cases in which forms

          have been exchanged and subsequent disputes reveal that the forms

          are contradictory.  That is, the last form would always govern.

                    The purpose  of section 2-207, as  stated in Roto-Lith,
                                                                 _________

          "was to modify the strict principle that a response not precisely

          in accordance with the offer was a rejection and a counteroffer."

          Roto-Lith,  297 F.2d at 500; see  also Dorton v. Collins & Aikman
          _________                    _________ ______    ________________

          Corp.,  453 F.2d  1161,  1165-66 (6th  Cir.  1972) (stating  that
          _____

          section  2-207 "was  intended to  alter the  'ribbon-matching' or

          'mirror'  rule of  common  law,  under  which  the  terms  of  an

          acceptance  or confirmation were required to  be identical to the

          terms of the offer").    Under the holding advocated  by Elmwood,

          virtually any response that added to or altered the terms of  the

          offer would be  a rejection and a counteroffer.   We do not think

                              
          ____________________

          party.").

                                         -13-

          that such a result is consistent with the intent of section 2-207

          and we believe it to be expressly contradicted by Comment 6.

                    Applied  to  this  case,   our  holding  leads  to  the

          conclusion  that the  contract is  governed by  section 2-207(3).

          Section 2-207(1) is inapplicable because Elmwood's acknowledgment

          is conditional on assent to the additional terms.  The additional

          terms do not become a part of the contract under section 2-207(2)

          because notification of objection  to conflicting terms was given

          on  the order  form and  because the  new terms  materially alter

          those  in the  offer.    Finally,  the  conduct  of  the  parties

          demonstrates the existence of a  contract, as required by section

          2-207(3).   Thus, section 2-207(3)  applies and the  terms of the

          contract are to be determined in accordance with that subsection.

                    We conclude, therefore, that section  2-207(3) prevails

          and  "the terms of the particular contract consist of those terms

          on which the  writings of  the parties agree,  together with  any

          supplementary terms incorporated  under any  other provisions  of

          this chapter."  Mass. Gen. L. ch. 106,   2-207(3).

                    The reality of modern commercial dealings, as this case

          demonstrates, is that not all participants read their forms.  See
                                                                        ___

          James J. White & Robert S. Summers, Uniform Commercial Code   1-3
                                              _______________________

          at  6-7 (4th ed. 1995).  To  uphold Elmwood's view would not only

          fly  in the face  of Official Comment  6 to section  2-207 of the

          Uniform Commercial Code, and the overall purpose of that section,

          it would also fly in the  face of good sense.  The sender  of the

          last  form  (in  the  instant  case,  the  seller)  could  insert

                                         -14-

          virtually any conditions it  chooses into the contract, including

          conditions  contrary to  those in  the initial  form.   The final

          form,  therefore, would give its sender the power to re-write the

          contract.   Under our holding  today, we at  least ensure that  a

          party will not be held to terms that are directly contrary to the

          terms it has included in its own form.  Rather than assuming that

          a failure to object to the  offeree's conflicting terms indicates

          offeror's   assent  to  those  terms,  we  shall  make  the  more

          reasonable inference that  each party continues to  object to the

          other's contradictory terms.  We think  it too much to grant  the

          second form the power to contradict and override the terms in the

          first form.

                                         -15-

                                   IV.  Conclusion
                                   IV.  Conclusion

                    For  the reasons  stated herein,  the district  court's

          order denying  Elmwood's motion  for partial summary  judgment is

          affirmed  and  the case  is remanded  to  the district  court for
          affirmed                    remanded  
          ________                    ________

          further proceedings.

                                         -16-