Santa Clara California Merchant's Objection to Additional Term

State:
Multi-State
County:
Santa Clara
Control #:
US-02465BG
Format:
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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

???????? If one or both parties are non-merchants, the contract is formed according to the terms of the original offer, and the additional terms of the acceptance are ignored.

The UCC also does not apply if none of the parties are a merchant. In other words, the sale of goods between individuals is governed by the common law. If a sales transaction involves a merchant, then the UCC usually applies.

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.

If both parties are merchants, the additional terms become a part of the contract, unless: they materially alter the contract, acceptance is conditioned on the specific terms of the offer, or. the offeror specifically rejects the additional or different terms.

Formation. The contract is governed by the UCC, so both parties must Merchants. The Offeror - the merchant who offers to sell goods - offers to sell goods to the buyer (offeror). This offer remains on the table for either an express or implied period of time.

These exceptions are admission, performance, and promissory estoppel. Admission means that an oral contract can be enforced without meeting the requirements of a statute of frauds if the other party admits under oath that the oral contract was made.

(1) ?Merchant? means a person who deals in goods of the kind or otherwise by his occupation holds himself out as having knowledge or skill peculiar to the practices or goods involved in the transaction or to whom such knowledge or skill may be attributed by his employment of an agent or broker or other intermediary who

There is an exception to the writing requirement under the UCC known as the merchant's confirmatory memo. This requires: (1) that both parties be merchants, (2) there to be a writing that accurately reflects the agreement between the parties, and (3) requires that the writer sign the memo.

The additional terms contained in the offeree's form are treated as ?proposals for addition to the contract.? If the parties are both merchants, the additional terms become part of the contract unless: 1. The offer expressly limited acceptance to its own terms. 2. The new terms would materially alter the offer, or 3.

Section 2-207(1) provides that ?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.?

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Santa Clara California Merchant's Objection to Additional Term