Worksheet Answers
Prof. Bill Long 2/3/05
In addition to giving answers to questions from the worksheet, I will on occasion change a fact or two in the problem so that you might see Art. 2 working in those situations too. If you have any questions on the answers or my analysis, ask in class or after class.
2-201
1a. No. According to 2-201(2), when a transaction is between merchants and a written confirmation of the contract is sent within a reasonable time, the receiving party has 10 days to give written objections to the contents. No signature by the one against whom enforcement is sought is necessary in the case of merchants. Thus, the SoF will not be available to A under these facts.
1b. No. Here the issue has to do with what is meant by A's "receiving" the confirming letter from B. In new 1-202(e)(2) we see that receipt is not simply that something comes to someone's attention (1-202(e)(1), what we might call the "common sense" understanding of "receive"), but something that is "duly delivered in a form reasonable under the circumstances at the place of business.." So, even though A didn't sign the form or even read it, A will be charged with having received it under 2-201(2), and the SoF will not be available to A.
1c. Yes and no. What I mean is that this is the kind of question where legal analysis rather than conclusion is the important point. We are under 2-201(2). A has responded in writing and so the legal question is whether her letter constitutes an "objection to its contents" (of B's confirmation letter). What is "its" here? Is it the contract itself or B's confirmation letter? If you argue the latter, then the issue of changing the time of delivery may well be an objection to the contents of the confirmation. If you argue that it is the contract that "its" refers to, then time of delivery under the UCC may not be a material term and thus A's writing may not be an objection to the contents. Most courts would hold that it is not an objection to the contents. If A's written response is not an objection to the contents, A will not have the SoF available to her as a defense against enforceability.*
[*Note that if I changed the hypothetical to say that A "called" to tell B that she objected on the issue of immediate delivery, A would not be able to later to interpose the SoF successfully because 2-201(2) requires a timely written objection.]
2. This implicates 2-201(3)(b). This section provides that the writing requirement of the SoF is not necessary if "the party against whom enforcement is sought admits in pleading, testimony....that a contract for sale was made." That is, B should argue that A might well admit in "testimony" that a contract exists. A's sneering words to B at the convention are not an admission that a contract exists. Thus, B would argue that A's appeal to the the SoF may be defeated by A's admission of a contract. By deposing A, B will certainly ask, in many ways, whether a contract exists. B can also call the witnesses, though their testimony to a contract does not conclude the matter. Note it is the "party" that must admit the contract. But, if you are staring down at 5 witnesses who say there is a contract and you are tempted to deny it, you may have other (i.e., perjury) problems if you deny it. "Let me take A's deposition," then, will be B's response in a nutshell.
2-207
1. Yes and yes. 2-207(1) revises the CLC by providing that differing forms do not operate as counteroffers, but serve as acceptances. This was the first problem that the drafters of 2-207 intended to solve--to get beyond the "mirror image" rule of the CLC by allowing far more circumstances where contracts may be concluded.
2a. Under the facts of the case, Yes. The correct legal analysis is to go phrase by phrase in the statute. You first recognize that B's terms may be "additional or different terms." Then you ask whether "acceptance is expressly made conditional on assent to the additional or different terms." 2-207(1). Courts have held that this clause is implicated if B's words are unambiguous and conspicuous and require A's agreement in order to proceed. We do not have that here. Then we go to 2-207(2). These additional terms may be construed as additions to the contract. But your question is whether they "materially alter" the contract. If they do not do so, then S's words are binding on B. You look at Cmts 4 and 5 to try to understand how the Code/Comments define "materially alter." The last few sentences of Cmt. 5 says that limitation of remedy clauses are not material alterations. Therefore, S's declaration in its AF is not a "material" alteration of the contract, and will be enforceable against B. If the terms were "additional," and B objected to them (no mention is made of objection in writing. Do you suppose that is an oversight? 2-207(2)(c)), then S's terms also do not become part of the contract.
2b. Yes. B's language controls. You should mention here that 2-207 is a modified "first shot" rule, changing the CLC, which is a "last shot rule." What this means is that under the CLC the seller could dictate terms of the deal (if she was the one who responded to buyer's offer to buy) because her terms would be a counteroffer. Under Art. 2 there is no provision for the S to "knock out" B's terms. S can have its own terms, but if you really don't like B's terms, you ought not to send an AF.*
[*A more difficult hypothetical is what you do if B has a clause allowing it 2 years to pursue an action while S has one which only allows one year. Many courts have used the above analysis to have B's term control, but there is growing dissatisfaction with this approach. The more recent approach is to knock out contradictory terms and have the SoL in 2-725 control.]
3. This problem implicates 2-207(3). This section has an explicit "knockout rule" (no pun intended with respect to the yo-yo that lodges in little Johnny's head) which provides that in the case of agreement by conduct it is the common terms that will form the basis of the contract, supplementd by "terms incorporated under any other provisions of this Act" (i.e., Art. 2). Thus, we go to 2-725(1) and have a 4 year SoL. So, ultimately B will win again.
Copyright © 2004-2007 William R. Long |