C_Capobianco-module2-assignment
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Ashworth College *
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C12V
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Law
Date
Jan 9, 2024
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Pages
5
Uploaded by ccapobianco1323
1
Case Analysis 1
Summary of the Facts of the Case:
This case is a fundamental contract law issue. The buyer issued a purchase order for specific
goods, and in response, the seller provided an invoice that contained additional terms barring the
recovery of consequential damages. This provision was absent in the buyer’s original purchase
order, leading to the question of which terms should govern the transaction and bind the parties.
Identification of the Parties and Their Positions:
●
Buyer: The buyer’s position is straightforward – they issued a purchase order with
specific terms, expecting those terms to guide the transaction. The absence of any clause
in their purchase order relating to consequential damages indicates their intention to
retain the right to claim such damages should the need arise. They contend that the
seller's additional terms, introduced later in the invoice, materially alter the agreement
and should not be considered.
●
Seller: The seller’s perspective is different. They believe that their invoice, which
contains terms barring consequential damages, should stand as the agreed terms for the
transaction. Their stance rests on the assertion that the terms in their invoice should either
be considered or that the buyer's silence on this provision in their purchase order should
be construed as an acceptance of their terms.
Procedural History:
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Legal references and precedents play a significant role in shaping the decisions of cases like this.
The Uniform Commercial Code (UCC) § 2-207 provides a framework for understanding and
resolving situations where acceptance includes additional terms.
“At common law, the mirror
image rule requires an acceptance to be exactly like the offer. The rule is reversed under the
Uniform Commercial Code, however. Under UCC § 2-207, an acceptance is still an acceptance
even though it states different or additional terms from the offer” (
Battle of the forms UCC
2-207)
)
The court analyzed the situation against this backdrop, considering the intention and
nuances of both parties' actions and the documents exchanged.
Legal Issue in Question:
Contract law often delves into intentions, written expressions, and the parties' understandings.
The most crucial point here is the interpretation of UCC § 2-207 – how should the law handle
situations where a response to an offer (like an invoice in response to a purchase order) contains
terms that were not part of the original offer?
Court's Ruling:
The court, through a meticulous analysis, determined that the seller's additional terms in the
invoice materially altered the contract. Using the “knock-out” rule from Comment 6 to § 2-207,
the court reasoned that conflicting terms from the buyer and seller would be nullified. According
to CALI a knockout rule “
holds that the conflicting terms cancel one another” (Verkerke &
Verkerke, 2015).
This means the additional terms barring consequential damages, as listed in the
seller's invoice, would not become part of the contract.
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Most Important Facts for the Decision:
The court leaned heavily on the clarity (or lack thereof) in the seller's documents. If the seller
wanted to include their additional terms as an absolute requirement for the sale, their invoice
should have expressed this intention distinctly. The court noted the lack of express conditionality
in the seller's invoice, and this ambiguity led to the court's decision.
Are there any situations in which it might be a good idea to include additional or different terms
in the “acceptance” without making the acceptance expressly conditional on assent to the
additional or different terms?
Contractual relationships are dynamic. Sometimes, a party realizes that certain terms, not
initially considered, become pertinent after the initial offer, often due to changing circumstances
or newly recognized risks. However, for the sake of clarity and preventing disputes, any
additions or changes should be expressly communicated, ideally with a condition for the other
party's assent.
Under what conditions can a contract be formed by the parties’ conduct? Why wasn’t the
conduct of the parties here used as the basis for a contract?
The thing about contract law is that it recognizes both written and unwritten understandings.
Conduct, in many cases, can evidence a mutual agreement even when paperwork is unclear. Such
formation based on conduct underscores the importance of actions in demonstrating mutual
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intent. In this case, the court did not need to rely on conduct as the writings already offered
sufficient clarity.
Do you agree or disagree with the court’s decision? Provide an explanation for your reasoning
either agree or disagree.
The court’s decision is commendable as it shows the importance of clarity in commercial
transactions. While the UCC aims to simplify and clarify commercial transactions, parties must
also be clear in their intentions. Ambiguities can lead to disputes, as seen in this case. The court,
in its wisdom, favored a neutral ground that respects the intentions of both parties while
upholding the spirit of the UCC.
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Works Cited
Jennifer S. Martin. (n.d.).
Battle of the forms (UCC 2-207)
. CALI.
https://www.cali.org/lesson/822#:~:text=At%20common%20law%2C%20the%20mirror,ad
ditional%20terms%20from%20the%20offer.
Option wireless, ltd. v. OpenPeak, inc., no. 9:2012CV80165 - document 19 (S.D.
Fla. 2012)
. Justia Law. (n.d.).
https://law.justia.com/cases/federal/district-courts/florida/flsdce/9:2012cv80165/394852/19
/
Verkerke, J. H., & Verkerke, J. H. (2015, February 26).
UCC section 2-207
. Go to
the cover page of Contracts Doctrine, Theory and Practice.
https://verkerkecontractsone.lawbooks.cali.org/chapter/ucc-section-2-207/