Navigating the Battle of the Forms
- Reza Yassi
- Oct 24, 2024
- 2 min read
Updated: Jan 24
Demystifying the 'Battle of the Forms' Under NY UCC
In commercial transactions, it's common for buyers and sellers to exchange documents like purchase orders, invoices, and confirmations, each containing their own terms and conditions. This can lead to conflicting terms, a situation known as the "Battle of the Forms."
Understanding UCC §2-207
Acceptance with Varying Terms:
An acceptance or confirmation can operate as an acceptance even if it states terms additional to or different from those in the offer.
Between Merchants:
When both parties are merchants, additional terms become part of the contract unless:
The offer expressly limits acceptance to its own terms.
The additional terms materially alter the original offer.
Notification of objection to the additional terms has been given or is given within a reasonable time.
Material Alterations
Terms that would result in surprise or hardship if incorporated without express awareness by the other party.
Examples include clauses that negate standard warranties or drastically change remedies.
Resolving Conflicts
Conduct Establishes Contract:
If the parties act as if a contract exists, their conduct establishes a contract, and the UCC provides default terms for any conflicting areas.
Knock-Out Rule:
Conflicting terms may cancel each other out, and the UCC's gap-fillers apply.
Key Takeaways:
Be aware that your standard forms may not be the final word in contract terms.
Review and respond to any differing terms in the other party's documents promptly.
Consider negotiating and drafting a master agreement to avoid conflicts.
Disclaimer:
This article is for informational purposes only and does not constitute legal advice. Although I am an attorney, I am not your attorney, and reading this article does not create an attorney-client relationship. For advice pertaining to your specific situation, please consult a qualified attorney licensed in your area.
