Merchant's Objection to Additional Term

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Multi-State
Control #:
US-02465BG
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Description

Unless it is expressly specified that an offer to buy or sell goods must be accepted just as made, the offeree may accept an offer and at the same time propose an additional term. This is contrary to general contract law. Under general contract law, the proposed additional term would be considered a counteroffer and the original offer would be rejected. Under Article 2 of the UCC, the new term does not reject the original offer. A contract arises on the terms of the original offer, and the new term is a counteroffer. The new term does not become binding until accepted by the original offeror. If, however, the offer states that it must be accepted exactly as made, the ordinary contract law rules apply.

In a transaction between merchants, the additional term becomes part of the contract if that term does not materially alter the offer and no objection is made to it. However, if such an additional term from the seller operates solely to the seller’s advantage, it is a material term and must be accepted by the buyer to be effective. A buyer may expressly or by conduct agree to a term added by the seller to the acceptance of the buyer‘s offer. The buyer may agree orally or in writing to the additional term. There is an acceptance by conduct if the buyer accepts the goods with knowledge that the term has been added by the seller.

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FAQ

Additional Term means any Contract term in addition to and after the Original Term, each of which is a 12-Month period beginning January 1.

Dickered terms are specific terms that are agreed upon by both parties, but not necessarily written. E.g., quantity, price, model, color, etc.

The policy of section 2-207 is that the parties should be able to enforce their agreement, whatever it is, despite discripancies between the oral agreement and the confirmation (or between an offer and acceptance) if enforcement can be granted without requiring either party to be bound to a material term to which he

§ 2-207. Additional Terms in Acceptance or Confirmation. (3) Conduct by both parties which recognizes the existence of a contract is sufficient to establish a contract for sale although the writings of the parties do not otherwise establish a contract.

If both parties are merchants, additional terms in the acceptance will be included in the contract unless: (1) they materially alter the terms of the offer, (2) the offer expressly limits acceptance to the terms of the offer, or (3) the offeror objects to the terms within a reasonable time.

Statute of frauds: Main exceptions Merchant's Exception (UCC 2-201 (2)): If you and your Buyer are both merchants, and you sent him something in writing memorializing the oral agreement (some courts consider detailed invoices sufficient), and he did not object, the oral contract is enforceable.

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Merchant's Objection to Additional Term