The rule
UCC 2-207 can govern a response or confirmation containing added terms, including a writing following an oral order. A nonconditional acceptance can form a contract while proposing an additional clause; merchant exclusions and any express agreement determine incorporation; performance can establish a contract when the communications do not. Conflicting terms require the governing jurisdiction's treatment.
Elements
- Identify the offer or completed oral agreement.
- Determine whether acceptance clearly depends on assent.
- For added merchant terms, test restricted acceptance, material alteration and timely objection.
- If performance alone establishes agreement, retain agreed terms and UCC supplements.
Exceptions and limits
- Two printed forms are not necessary.
- Material alteration and conditional acceptance are separate questions.
When the issue arises
Put the communications in order. When arbitration, warranty or liability language arrives after an order or telephone conversation, determine whether the parties already agreed to the sale before treating the later document as an offer or using their conduct to supply a contract. Delivery is another event, not an answer. A buyer who signs nothing but accepts goods still presents a separate question about which disputed terms, if any, became part of the bargain.
Locate the disputed clause in the transaction
Write a short chronology: oral discussions, order, response, objections, and performance. In Brown Machine, the earlier quotation did not settle which document was the offer. In Dorton, the trial court still had to determine whether the later forms accepted oral offers or confirmed completed oral agreements.
Do not call every later document a modification. Step-Saver used 2-207 to evaluate a later confirmation when the parties had not adopted it as their final writing or agreed modification. An integration sentence printed by one party did not prove mutual adoption.
Conditional on terms is different from conditional on assent
Dorton required a clear indication that the offeree would not proceed without assent to the added terms. The seller's description of the deal as subject to its printed conditions did not establish that requirement. A response can therefore accept while proposing an additional clause.
Step-Saver examined the seller's conduct as well as its package language. The supplier continued selling after the buyer rejected separate proposed agreements. The court did not decide that a refund offer could never matter; it found the record did not demonstrate the claimed insistence on assent.
Incorporation needs its own analysis
For an additional term between merchants, check the offer's restriction, material alteration and timely objection. Dorton left material alteration of arbitration for findings; Step-Saver found its disclaimer and remedy limit would materially shift the risk if the alleged warranties were established. Neither case supports automatically including all fine print through silence.
Read the two subsections beside each other: (1) mentions different terms, while (2) speaks only of additional ones. If the buyer requires a warranty and the seller disclaims it, identify the assigned court’s method for resolving that conflict and apply it to the documents. An answer cannot simply insert a universal knockout rule without authority for that approach.
If the communications fail to establish a contract but both parties perform, subsection (3) supplies terms on which the writings agree and UCC supplements. That does not award every term to whichever party sent the first or last form.
A simple fact pattern
Facts. A merchant seller acknowledges a merchant buyer's oral order and adds arbitration. The acknowledgment does not clearly insist on the buyer's assent, and the buyer accepts delivery. The record does not say whether arbitration was discussed orally or whether such clauses materially change bargains in this trade.
Analysis. Trace the disputed promise back to the telephone conversation. If the parties settled on arbitration there, the writing can record that bargain rather than propose a new term. If not, the clause presents an additional-term problem; evidence about the trade and any objection is needed before deciding incorporation.
Receiving the shipment does not fill those evidentiary gaps. Nor should an answer invent an oral arbitration agreement merely because the seller later printed one.
A harder fact pattern
Facts. An order and response agree on quantity and price but conflict on warranty protection. The response clearly makes acceptance depend on the buyer's assent to its disclaimer. The buyer never assents, orally or otherwise, yet the seller ships and the buyer receives and pays for the goods.
Analysis. Assuming that clear condition prevents acceptance under subsection (1), performance can still establish a contract under subsection (3). Retain agreed terms and use applicable UCC supplements for the unresolved subject. Do not treat taking the goods as agreement to the disclaimer; separately determine any warranty's statutory requirements and any breach.
Leading cases
Dorton v. Collins & Aikman Corp.
An acceptance is expressly conditional under UCC 2-207 only when it clearly makes proceeding depend on the offeror's assent to the added terms. Dorton remanded the separate question whether arbitration became a contract term.
1991Step-Saver Data Systems, Inc. v. Wyse Technology
TSL's later box license did not add its warranty disclaimer and remedy limit to this commercial bargain. Step-Saver still had to establish its warranties on remand; excluding the license did not prove a breach.
Compared with nearby doctrines
| Doctrine | How it differs |
|---|---|
| Contract modification | An agreed change raises modification rules; a later unilateral confirmation does not become a modification merely by arriving after an agreement. |
| Acceptance | Decide whether the communication accepts or insists on further assent before deciding which proposed terms enter. |
Common exam mistakes
- Requiring two printed forms before considering 2-207.
- Treating every added term as an expressly conditional response.
- Concluding that knowledge of a seller's preferred terms is express agreement to them.
- Using subsection (3) without explaining why the communications failed to form a contract.
Practice questions
Two merchants exchange forms for 400 lamps. The buyer's offer expressly limits acceptance to its terms.
The seller promptly accepts without making acceptance conditional, but adds an inspection deadline. Assume no later assent to that deadline. Under model UCC 2-207, which conclusion follows?
Answer and explanations
Correct answer: B.
Authority: UCC 2-207(1) and (2)(a): acceptance and express limitation
- A. Wrong. A definite and timely nonconditional acceptance can establish a contract even when its form contains an additional provision.
- B. Correct. Formation and incorporation require separate analysis. The stated express limitation is an exclusion under subsection (2), even between these merchants.
- C. Wrong. Merchant status does not eliminate the exclusions in subsection (2). Here the offer expressly limits acceptance to its own terms.
- D. Wrong. The statute does not make the last form controlling simply because it was sent later. Identify which statutory route supplies the contract terms.
A buyer's purchase order and a seller's expressly conditional response do not themselves establish a goods contract. The buyer never assents to the response's added arbitration clause.
Both sides nevertheless ship, receive and pay for the specified goods. Applying model UCC 2-207(3), what is the best next step?
Answer and explanations
Correct answer: D.
Authority: UCC 2-207(3): contract recognized by conduct
- A. Wrong. Subsection (3) recognizes a contract through both parties' conduct even when their documents fail to establish one.
- B. Wrong. Performance establishes a contract on these assumptions, but does not by itself establish assent to the added arbitration provision.
- C. Wrong. The subsection identifies agreed terms and supplementary statutory terms, not a wholesale combination of both sides' disputed clauses.
- D. Correct. Their conduct supplies formation. The next task is to distinguish matching terms from disputed additions and determine which Code provisions fill genuine gaps.
More contracts practice questions and essays
Quick answers
Can 2-207 apply to one written form?
Yes. Dorton involved oral orders followed by written acknowledgments, with findings needed about whether those writings accepted or confirmed.
Does an arbitration clause always materially alter a sale?
Dorton did not adopt that automatic rule. It required findings on whether the clause was additional and, if so, materially altered the particular bargain.
Does excluding a disclaimer prove a warranty breach?
No. Step-Saver remanded to determine the alleged warranties and other relevant issues. Failure to incorporate the disclaimer did not prove the whole warranty claim.