UCC 2-207 — Battle of the Forms

Businesses rarely sign one negotiated document. A buyer sends a purchase order on its own form; the seller answers with an acknowledgment or invoice on its own form; the forms disagree on the back-of-the-page boilerplate; and the goods ship anyway. Under the common-law mirror-image rule, the seller’s non-matching form would be a counter-offer, and the buyer’s acceptance of the goods would silently accept the seller’s terms, the so-called last-shot rule. UCC § 2-207 was enacted to fix that. It gets its own class because its three subsections do three different jobs, and the discipline is to run them in order. This rule applies only to sales of goods; for services, real estate, and the like, the mirror-image rule still controls.

The three subsections, in order

UCC § 2-207(1). A definite and seasonable expression of acceptance, or a written confirmation sent within a reasonable time, operates as an acceptance even though it states terms additional to or different from those offered, unless acceptance is expressly made conditional on assent to those terms. The first question is therefore formation: did the response accept, or did it condition the deal on the new terms? A response that merely adds or varies terms forms a contract; a response that says, in substance, “no deal unless you agree to my terms” does not.

UCC § 2-207(2). When a contract has formed under (1), the additional terms are proposals for addition. Between merchants, those proposals become part of the contract unless (a) the offer expressly limits acceptance to its own terms, (b) the terms materially alter the contract, or (c) the offeror has already objected or objects within a reasonable time. If either party is not a merchant, additional terms are mere proposals and do not enter the contract without express assent. Material alterations, such as a clause that would result in surprise or hardship if incorporated without express awareness, drop out.

UCC § 2-207(3). Where the writings do not form a contract but the parties’ conduct recognizes one, conduct establishes the contract. Its terms are those on which the writings agree, plus the UCC’s gap-fillers. This is the home of the knockout rule for conflicting terms: where offer and acceptance each state a different term on the same subject, both cancel and the Code’s default supplies the gap.

The materiality and knockout lines

Two distinctions decide most § 2-207 problems. First, additional terms (new subjects the other form is silent on) run through (2); conflicting terms (the two forms disagree on the same subject) are knocked out. Second, between merchants the materiality of an additional term decides whether it enters under (2): immaterial terms join the contract, material alterations fall away. Keep the sequence rigid: ask formation under (1) first, then term inclusion under (2), and reach (3) only when (1) fails to form a contract on the writings but the parties performed anyway.

Cases

Flender Corp. v. Tippins International is the knockout case in working form. The forms formed a contract under § 2-207(1) because Flender’s invoice was a definite acceptance, not expressly conditional. But the buyer’s arbitration-in-Vienna clause and the seller’s litigation-in-Chicago clause conflicted directly, so both were knocked out and background jurisdictional law governed; the court refused to compel arbitration. Held against the mirror-image counterfactual, the case shows the UCC’s central policy: minor or even conflicting boilerplate should not blow up a deal the parties plainly intended, so the Code forms the contract and lets defaults fill the gap.

What you should be able to do

Apply UCC § 2-207(1) to decide whether a battle-of-forms exchange formed a contract, and spot the “expressly conditional” language that defeats formation. Apply § 2-207(2)‘s between-merchants analysis to additional terms and identify which drop out as material alterations. Apply the knockout rule under § 2-207(3) when conduct, not the writings, establishes the contract, and name the UCC gap-fillers that take over. Run all three on one fact pattern in sequence, and explain why Flender enforces neither side’s forum clause. Class 11 is the Module II capstone, where the battle of the forms becomes a graded skills assessment alongside the offer life-cycle you have been building since Module I.