Key of G Products, Inc, offers to sell to Harmony Company one hundred MP3 players at $50 a piece, subject to certain specific delivery dates. Harmony replies with a signed purchase order that reads, "Accept your of-fer for 100 I-appliances at $50 each

Question

Must be delivered to our ware-house." Key of G does not respond or deliver the goods. Harmony files a suit for breach of contract, to which Key of G answers that there is no contract because Harmony's purchase order contained additional terms and is not signed by Key of G. Can Harmony recover? Explain.

Answer 1

Yes, Harmony can recover.
Additional or different terms in an unconditional ac-cep-tance, which is otherwise definite and timely, are interpreted as pro-pos-als for additional terms to a contract, unless the contract is between mer-chants. In that situation, the terms become part of the contract un-less (1 ) the offer expressly limits acceptance to its terms, (2 ) the addi-tional terms materially alter the contract, or (3 ) the offeree objects to the addi-tional terms within a reasonable time.

Here, the offer did not ex-pressly limit the acceptance, the extra terms did not materially change the con-tract, and Key of G did not object within a reasonable time. If either or both of the par-ties is not a merchant, a contract is formed according to the terms of the original offer. Thus, here, the additional term (delivery to Harmony's warehouse) would have become part of the contract even if one or both parties had not been merchants.

Key of G's Statute of Frauds claim (that the purchase order was not signed by Key of G) also fails. For a con-tract for a sale of goods between merchants, when one party sends a writ-ten con-firmation within a reasonable time after terms have been reached orally, the confirmation is binding unless the recipient objects within ten days of receipt. The merchant receiving the communication must have reason to know its contents, but it needs to be signed only by the party who sends it. Here, Key of G received the signed writing, but did not object within the ten days.