The Battle of the Forms and the Unsigned Deal
Merchant Maker (State M) and Merchant Buyer (State B) negotiate by phone for 500 industrial pumps. Buyer mails a purchase order: '500 pumps, $10.00 each; all disputes arbitrated in State B.' Maker replies by email, typing its name at the bottom: 'We accept-500 pumps at $10.50 each. All disputes must be litigated in State M, and this acceptance is expressly conditioned on Buyer's assent to that term.' Buyer says nothing. Two weeks later Maker ships 500 pumps at $10.50; Buyer accepts the shipment, resells the pumps, and sends a $5,000 check marked 'paid in full.' Maker sues for the $250 difference. Buyer moves to compel arbitration under its purchase order. Neither party signed a paper document.
1. Is there a contract, and if so, what price term governs? Analyze UCC §§ 2-207 and 2-305.
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There is a contract, but neither party's price term controls.
- § 2-207(1). A definite and seasonable expression of acceptance operates as an acceptance even on different terms-unless it is expressly made conditional on assent to the additional or different terms. Maker's email contains exactly that magic language. So it is not an acceptance; it is a counteroffer, and Buyer never assented.
- § 2-207(3). The writings alone do not form a contract, but the parties' conduct does: Maker shipped, Buyer accepted and resold the goods, and Buyer paid. The contract consists of the terms on which the writings agree, supplemented by UCC gap fillers.
- What the writings agree on: 500 industrial pumps and a sale of them. They agree on almost nothing else.
- The price. Because the writings disagree ($10.00 vs. $10.50), there is no agreed price, and § 2-305 supplies a reasonable price at the time of delivery. Both figures are evidence of market value; neither is binding. Buyer's 'paid in full' marking does not control either-it is not an accord and satisfaction of a liquidated claim, and a unilateral endorsement cannot rewrite a price term.
Judgment call: courts using a 'knockout' analysis under § 2-207(2) rather than § 2-207(3) reach the same destination-both price terms cancel and the gap filler applies-so the result is stable even if the doctrinal path is not.
2. Should the court compel arbitration and enforce the State M forum clause? Address why neither party's dispute-resolution term survives.
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No-the court should compel arbitration neither here nor anywhere.
- Maker's litigation clause. Because Maker's reply was a conditional counteroffer that Buyer never accepted, its State M forum term never became part of any contract. Under § 2-207(3), the gap fillers do not include a forum-selection clause; the UCC supplies no such term, and courts will not invent one.
- Buyer's arbitration clause. For the same reason, Buyer's arbitration term dropped out. It would also drop out under the alternative route: if Maker's reply were treated as an acceptance with additional terms under § 2-207(2), an arbitration clause is a material alteration in a contract for pumps-it waives a jury and changes the forum-so it would be knocked out in any event, even between merchants.
- Federal Arbitration Act. Section 2 requires a written agreement to arbitrate. Where the very existence of an arbitration agreement is disputed, the court, not the arbitrator, decides that gateway question unless the parties clearly delegated it. There is no delegation here because there is no agreement.
Result: the dispute proceeds in court-but not necessarily in State M, since Maker's forum clause also fails; venue and jurisdiction follow the ordinary rules for the court where suit was filed.
3. Buyer argues the contract is unenforceable under the statute of frauds because no paper was signed. Evaluate that defense under UCC §§ 2-201(1), 2-201(2), and 2-201(3)(c).
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The statute of frauds does not bar enforcement of this contract for the 500 delivered pumps.
- § 2-201(1). A sale of goods over $500 requires a writing indicating a contract and stating a quantity, signed by the party against whom enforcement is sought. 'Signed' is generous-any symbol with a present intention to authenticate suffices, and typed names in business emails qualify. Maker's email indicates a contract (500 pumps, price stated) and bears Maker's typed name, so it is sufficient against Maker. Buyer's purchase order is similarly sufficient against Buyer.
- § 2-201(2) (merchant confirmation). Buyer's purchase order could bind Maker as a written confirmation if Maker had reason to know its contents and did not object within ten days. Maker did respond within ten days, and its response changed the price and added a forum term-arguably a sufficient objection to the confirmation. That route is uncertain and the better practice is not to rely on it.
- § 2-201(3)(c) (received and accepted). Clearer and dispositive: with respect to goods that have been received and accepted, the contract is enforceable notwithstanding the statute. Buyer accepted all 500 pumps and resold them. Enforcement is therefore proper as to those goods, even though no instrument was formally executed.
Bottom line: Buyer cannot use the statute of frauds as a shield; the only live question is the price, which is gap-filled at a reasonable value as of delivery.