Oxtren, Inc is a tools wholesaler. Oxtren sent M&E Tools a purchase order offering to buy 200 Model 308 milling & drilling machines with R-8 spindles. The purchase order stated the credit term to be 2% discount if payment was made in 10 days, with the

Question

full amount due in 30 days. M&E responded with an acceptance form accepting the offer. The acceptance form, however, stated that full payment was due on delivery and that disputes under the contract would be settled by arbitration. (A) Do the parties have an agreement? (B) What is the payment term? (C) Is the arbitration clause part of the agreement?

Answer 1

(A) Under the UCC, the parties will have an agreement since they intended to create a contract. (B) The payment term in the acceptance is a different term. In the majority of states, different terms cancel each other out. In deciding the payment term, the court will look to enforce an oral agreement if one exists. Otherwise, the court looks to the gap-filler provision concerning payment. (C) The arbitration clause is an additional term. Under the UCC, since the parties are merchants, the arbitration clause will be part of the contract unless: (1) the offer insisted on its own terms; (2) the additional terms materially alter the terms of the offer; or (3) the offeror promptly rejects the additional terms.