Battle of the Forms in a Canned-Tomato Sale

Under UCC § 2-207, Midcoast's acknowledgment was an acceptance even though it stated different terms, unless it was expressly made conditional on Coastal's assent. It was not. The arbitration clause is therefore a proposed additional term. Between merchants, such a term becomes part of the contract unless the offer expressly limited acceptance to its terms, the term materially alters the contract, or Coastal objected within a reasonable time. Coastal's purchase order said all disputes must be litigated in Cumberland County, which is an express limitation and an objection to a different forum. Arbitration is also a material alteration: it strips the right to a jury trial and changes the forum and procedure. The fact that Coastal's manager signed and returned the acknowledgment without reading it is relevant but not decisive. A signature can show assent to a counteroffer, but the acknowledgment did not say it was conditional, so it operated under § 2-207 rather than as a new offer. On these facts, the arbitration clause likely did not become part of the contract, and Midcoast's motion to compel should be denied.

Coastal's rejection was effective if it acted within a reasonable time and gave seasonable notice. Under UCC § 2-601, a buyer may reject the whole shipment if the goods fail in any respect to conform, even if the defect is minor; the perfect tender rule applies because this is a single delivery, not an installment contract. Forty leaking cases out of 1,160 is a nonconformity. Midcoast delivered on June 4, after the June 1 contract date; under § 2-508, a seller may cure a nonconforming tender only if it had reasonable grounds to believe the goods would be accepted, and after the contract time has expired the cure right is narrower. Midcoast refused to cure and instead argued the defect was minor. That argument does not defeat rejection under § 2-601. Coastal's June 5 rejection was prompt. The main factual risk is whether Coastal's rejection of the entire shipment was in good faith; the UCC allows whole rejection, but the buyer must particularize the nonconformity. Coastal should win on rejection, though a court may require it to prove the 40 cases were part of a single nonconforming tender.

Coastal may recover cover damages under § 2-712: the difference between the cost of cover and the contract price, plus incidental and consequential damages less expenses saved. The stated $4,000 extra is the cover differential. The contract price was $18 per case; if Coastal bought 1,200 replacement cases, the cover price was $22 per case, and the differential is $4,000. If the $4,000 refers only to replacing 40 cases, the measure would be different and the court should require proof of the actual cover purchase. The consequential-damages disclaimer is in Midcoast's acknowledgment. If the arbitration clause was not included because it was a material alteration, the disclaimer may still be analyzed separately; a disclaimer of consequential damages is also a material alteration between merchants and would fail for the same reasons unless Coastal expressly agreed. Even if the disclaimer were effective, it would not bar the § 2-712 cover differential, which is direct damages. Coastal can also recover incidental expenses such as inspection or storage if proven.