Battle of the Forms in a Wedding-Flour Contract

Mill's acknowledgment was a definite and seasonable expression of acceptance, so it formed a contract even though it added terms. Under UCC 2-207, additional terms between merchants become part of the contract unless they materially alter it, the offer expressly limits acceptance to its terms, or the offeror objects within a reasonable time. The liability limitation and the five-day notice requirement are likely material because they would surprise or impose hardship on Cedar and substantially reduce the remedies the PO contemplated. Mill also did not make its acceptance expressly conditional on those terms. The PO's rejection clause survives as part of the original offer because Mill did not effectively displace it. The price, quantity, delivery date, and rejection right therefore control; the liability cap and short notice period are proposals that do not become contract terms.

Cedar probably accepted the goods by using them after a reasonable opportunity to inspect, but acceptance does not eliminate all remedies. Under UCC 2-607, a buyer who has accepted goods must notify the seller within a reasonable time after discovering a breach. Cedar discovered the problem on March 8 and gave same-day notice, so the notice requirement is satisfied even without the invalid five-day clause. As to the 200 pounds already used, Cedar can keep the goods and recover damages for nonconformity under UCC 2-714, measured by the difference between the value of the goods accepted and the value they would have had if conforming. Cedar may also be able to revoke acceptance of any unused nonconforming flour if the nonconformity substantially impairs value and was difficult to discover, but it cannot revoke as to the flour already consumed in the wedding order. The key is that acceptance affects rejection and revocation timing, not the damages claim for accepted nonconforming goods.

Cedar can seek direct and consequential damages. If Cedar bought replacement flour in good faith and without unreasonable delay, UCC 2-712 cover damages are the difference between the cost of cover and the contract price, plus incidental damages such as the $400 expedited shipping. The $3,000 lost wedding profit is consequential damages if it was foreseeable. Mill's representative knew the flour was for a specific 500-loaf wedding order, so the loss was within Mill's contemplation at contracting. The liability cap is probably not part of the contract because it materially altered the deal and was not expressly accepted. Even if it were included, a clause limiting consequential damages is enforceable unless unconscionable, and a remedy limited to the purchase price may fail of its essential purpose if the nonconformity deprived Cedar of the benefit of the bargain. The court should therefore allow foreseeable consequential damages unless it finds the limitation was properly incorporated and enforceable.