Court Opinion

ID: 9739747
Source: CourtListenerOpinion
Date Created: 2023-08-26 20:20:20.655438+00
Date Added: 2024-06-11T07:24:13.750161
License: Public Domain

KIRSCH, Judge,
concurring and dissent ing.
I fully concur with the rule of law set forth in the majority opinion. From its application to the facts of this case, however, I respectfully dissent.
ADM Milling Company purchased 60,000 bushels of wheat from Wilson Fertilizer & Grain, Inc. on October 20, 1992. The order was placed through a broker, Edward E. Smith & Co., Inc. The grain was shipped in two shipments: the first ten car loads were shipped the day of the order (October 20th); the remaining eight car loads were shipped two days later. On the date of the order, the broker sent a confirmation of the order; ADM also sent a confirmation the same day. The ADM confirmation contained the following language: "This Contract is also subject to the Trade Rules of the National Grain and Feed Association currently in effect.... The Trade Rules were not set forth in the contract." Included in these Trade Rules were an arbitration provision and a one year Hmitation period. When ADM did not pay as agreed, Wilson filed suit to collect the balance due. The response was a motion to dismiss based upon the arbitration provision in the Trade Rules. When the court ultimately granted the motion, ADM informed Wilson that the Trade Rules also provided a one year limitation period which had now expired.
The majority states: "The test for whether additional terms materially alter an agreement is whether their "incorporation into the contract without express awareness by the other party would result in surprise or hardship"" Opimion at 850. "Whether a term is a material alteration under Ind.Code § 26-1-2-207 is a question of fact to be resolved by the trial court...." Id. at 852. "[ Whether included arbitration provisions result in hardship or surprise depends on the circumstances of each case." Id. at 852.
The United States Court of Appeals for the Seventh Cireuit anticipated this holding in Luedtke Engineering Co. v. Indiana Limestone Co. (7th Cir.1984), 740 F.2d 598, where the court stated:
"First, Comment 4 to Section 2-207 defines 'material alteration' as a term that would 'result in surprise or hardship if incorporated without express awareness by the other party' Determining this requires the trial court to make a factual evaluation of the parties' positions in each case. As one court stated, materiality of a change is to be judged in large party (sic) by the expectations of the parties involved in the transaction. That is a determination uniquely within the province of a fact finder. ...' Ebasco Services, Inc. v. Pennsylvania Power & Light Co., 402 F.Supp. 421, 442-43 (E.D.Pa.1975). Second, other courts interpreting UCC Section 2-207 uniformly have held that the materiality of an alteration is a question of fact.... We hold that whether a term is a material alteration under Ind.Code § 26-*8561-2-207 is a question of fact to be resolved by the trial court...."
Id. at 600 (citations omitted).
The holding by the majority in this case and by the Seventh Cireuit in Luedike are supported by Professor Hawkland in his treatise on the Uniform Commercial Code. He states:
"Comments 4 and 5 [to UCC § 2-207] give examples of terms in the offeree's form which do and do not materially alter the contract created by the exchange of forms, but they are not particularly helpful since they involve the kinds of terms that normally would be included or excluded from most agreements because of trade usage.... There are many additional terms to be found in the offeree's form that neither adopt nor reject trade usage, however, and it is those terms that section 2-207(b) mainly addresses. If they are substantially different from the terms of the contract, silence will not constitute acceptance. If they differ only in minor respects, they can be accepted by silence. Whether there is substantial or minor difference in this regard is said to be a question of fact and that summary judgment usually is not appropriate where this question is an issue."
Hawkland, Uniform Commercial Code Series § 2-207:03 (1995) (emphasis added).
Applying the foregoing to the present case, there are two factual issues which should be determined by the trial court: The first issue is whether ADM's confirmation even constituted an acceptance within the meaning of UCC § 2-207. If the confirmation sent by the broker to Wilson was sent prior to ADM's confirmation, it constitutes the acceptance of the offer; the contract was fully formed by that confirmation. The later confirmation sent by ADM would only be a proposal to modify the contract as formed and UCC §$ 2-207 would not apply. Second, even if ADM's confirmation constitutes the acceptance and § 2-207 does apply, there is an unresolved question of fact as to whether the additional term contained in such confirmation results in hardship or surprise and thus constitutes a material alteration. In either event, these unresolved factual issues make the dismissal of this case inappropriate.
ADM Milling Company played the latest version of "Legal Gotcha." And it won. It has received the grain which it ordered and escaped paying for it.
I would reverse the dismissal and remand to the trial court to conduct an evidentiary hearing.