– Itoh sent Jordan a purchase order, Jordan sent back an acknowledgment stating “seller’s acceptance is expressly conditional on buyer’s assent to that additional or different terms and conditions set forth below. If not accepted, buyer should notify seller at once.”
- One of the exceptions was an “arbitration clause” that had no counterpart to Itoh’s order.
– Exchange of forms did not result in the formation of a contract under 2-207, Jordan’s form became a counter-offer.
- 2-207(3) created the contract due to the performance of both sides recognizing the existence of a contract.
– Clear they did not agree on arbitration…
– No arbitration clause agreed upon under the contract forming under 2-207(3).
– – Trial court ruled in favor of no arbitration, appellate court affirmed this notion.
– Can the arbitration clause be considered a supplementary term under some other provision of the code 2-207(3)?
– While a seller may take advantage of “expressly conditional terms” (by not sending the product w/o consent) he must accept the potential risk under sub section (3) of not getting his additional terms when he elects to proceed with performance without first obtaining buyer’s assent to those terms…
– If a seller’s performs prior to receiving assent to new terms, the buyer is not liable because he did not consent.
– Disputed additional terms (arbitration) that were not apparent under subsection (3) by language, cannot be brought back into the contract under the guise of “supplementary terms.”
– Seller does not need to ship goods if he believes the buyer did not consent to the additional terms.
– Under (3) the conduct that happens did not imply for the parties agreement on the arbitration clause.
– The fact that Jordan performed without receiving expressed consent from Itoh shows that it really didn’t want consent because they shipped the good anyways.