U.C.C. Section 2-207: When Does an Additional Term Materially Alter a Contract?
50 Pages Posted: 24 Aug 2016
Date Written: August 23, 2016
Abstract
In an effort to provide more clarity to a highly confusing area of law, Professor Timothy Davis surveyed ninety-four cases decided between January 1, 2005 and July 1, 2015 to see when additional terms in contracts constitute a material alteration under the U.C.C. The Article identifies the various factors that courts will consider to determine the issue, including (1) the subject matter of the additional term; (2) the test adopted for determining materiality; (3) the conduct of the parties; (4) the presence of course of dealing evidence; and (5) the language of comments four to U.C.C. section 2-207. Moreover, the Article focuses on six types of clauses that frequently appear as additional terms in acceptance and confirmation documents, including (1) arbitration; (2) disclaimer of warranties; (3) limitation of remedies, including consequential damages; (4) forum selection; (5) attorney fees; and (6) pre-judgment interest upon a buyer’s default. Through the extensive survey, Professor Davis concludes that, except for forum selection and pre-judgment interest clauses, courts tend to look at these issues on a case-by-case basis to determine whether or not additional terms materially alter a contract.
Keywords: U.C.C. Section 2-207, Materially Alter; Mirror Image Rule, Last Shot Rule, Surprise or Hardship Test, Course of Dealing, Implied Terms, Arbitration Provisions, Warranty Disclaimer Clause, Limited Remedy Clause, Interest Provisions, Attorney Fees Provision, Forum Selection Clause
Suggested Citation: Suggested Citation