CONTRACTS - GOODS

UCC applies to

goods

Output contracts

requires buyer purchase all that the seller produces unless the quantity is unreasonably disproportionate to previous normal amount

UCC 2-306 (2)

A lawful agreement by either the seller or the buyer for exclusive dealing in the kind of goods concerned imposes, unless otherwise agreed, an obligation by the seller to use best efforts to supply the goods and by the buyer to use best efforts to promote their sale.

UCC 2-207

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.

An acceptance that states additional or different terms does NOT destroy the contract UNLESS

the acceptance is expressly conditional on assent to the new terms. In other words “you have to accept my new terms or I don’t accept at all.”

The additional terms are to be construed

as proposals for addition to the contract

Between merchants such terms become part of the contract unless

the offer expressly limits acceptance to the terms of the offer;

they materially alter it; or

notification of objection to them has already been given or is given within a reasonable time after notice of them is received.

When 1 party is a non-merchant, additional or different terms are considered

”proposals” that must be expressly accepted to be considered part of the binding contract.

UCC 2-207(2)

additional terms that materially alter an agreement must be assented to by both merchant parties in order to be binding. 

Additional terms materially alter an agreement when they “result in surprise or hardship if incorporated without express awareness by the other party.” 

2-207(3)

applies when the acceptance IS expressly conditioned on the offeror’s assent to the additional or different terms. This means the acceptance is actually a counteroffer.  

If the other party does NOT expressly assent to the counteroffer, the contract may still survive IF the conduct of the parties “recognizes the existence of a contract.”  

If the conduct of the parties recognizes the existence of the contract, the contract will consist of the agreed terms PLUS the UCC gap fillers.