Collin Texas Merchant's Objection to Additional Term

State:
Multi-State
County:
Collin
Control #:
US-02465BG
Format:
Word; 
PDF; 
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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

Under Article 2 of the Uniform Commercial Code, when dealing with the sale of goods, the perfect tender rule states that a buyer is permitted to reject goods shipped or delivered to it from a seller if the seller's tender of the goods is in some way not perfect.

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

The Mirror Image Rule says that in order to form a valid and enforceable contract, the two parties must have documents that contain identical terms and conditions. This common-law rule applies to contracts for services or for real estate, but not for the sale of good (which, again, is governed by the UCC).

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

(1) 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

The "knock-out rule" is applied by courts to resolve a "battle of the forms" when the forms contain conflicting terms. In this situation, a contract is still formed but the rule operates to reject both parties' terms if there is a disagreement between the forms exchanged.

Under common law rules, if an acceptance contains different terms, it is a counter-offer instead. If the parties perform without ever reaching agreement on the terms, then whatever is in the final document exchanged between the parties is the final binding contract (also known as the last shot rule).

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Collin Texas Merchant's Objection to Additional Term