UCC Battle of the Forms: Confronting Conflicting Terms in Purchase Orders, Invoices and Related Documents

Minimizing Disputes Over Contract Formation, Enforceability, Terms and Conditions in Commercial Sale of Goods Transactions

Recording of a 90-minute CLE webinar with Q&A


Conducted on Wednesday, January 4, 2017
Recorded event now available


This CLE webinar will examine common causes of the “battle of the forms” in UCC sale of goods transactions and explain best practices for drafting and administering sales documents to minimize disputes over whether an enforceable contract actually exists and the terms and conditions of that agreement. The panel will discuss how various courts have applied and interpreted UCC Section 2-207 when the terms and conditions of purchase orders, invoices, quotes, offers, acceptances and other documents involved in the purchase and sale of commercial goods are in conflict.

Description

The “battle of the forms,” which arises when there is a conflict between the terms and conditions in the form documents exchanged by contracting parties in a commercial sale of goods transaction, is a complex and complicated area of contract law for attorneys due in part to the inconsistent application of UCC Section 2-207 by various jurisdictions as well as the increase in e-commerce transactions and resulting increase in transaction documents. Losing the “battle of the forms” can cost a party hundreds of thousands of dollars.

The two key questions at the center of the “battle of the forms” are whether a contract has been created and which party’s terms govern performance of the contract. Courts typically apply the “knock-out rule” when resolving a “battle of the forms” dispute. The rule allows conflicting terms to be “knocked out,” or rejected, and replaced by UCC Article 2 gap-filler provisions if certain criteria are met.

Drafting comprehensive sales invoices, purchase order forms and related documents that specifically outline the intent of both parties and are signed by both parties is key to protecting the interests of both parties to the transaction.

Listen as our authoritative panel discusses recent case law trends involving the “battle of the forms” and best practices for counsel to minimize disputes over the formation of a sales contract and its governing terms.

Outline

  1. Overview of Article 2 contract formation requirements
    1. Statute of frauds
    2. Quantity: Requirements and output contracts
    3. Contract interpretation: Course of performance, course of dealing and usage of trade
  2. Overview of UCC 2-207
    1. Acceptance
    2. Additional proposed terms
    3. The knockout rule
  3. Court application of UCC 2-207 to “battle of the forms” cases—latest developments
    1. Importance of determining the offer
  4. Impact of increase in e-commerce transactions on “battle of the forms” disputes
    1. UETA and e-sign
    2. UCC embraces electronic contracting
  5. What’s at stake
    1. Implied warranties
  6. Drafting best practices to minimize “battle of the forms” disputes
    1. Disclaim other documents
    2. Disclaim future documents
    3. Limit acceptance to terms of the offer/RFQ
    4. Object to new terms in writing
    5. Other best practices
  7. Managing the contracting process
    1. Objectives
    2. Communications
    3. Real world considerations
    4. Layered contracting

Benefits

The panel will review these and other key issues:

  • What impact has the increase in e-commerce transactions had on “battle of the forms” disputes?
  • How have courts applied UCC Section 2-207 when resolving “battle of the forms” disputes?
  • What drafting strategies have been effective for minimizing the likelihood of “battle of the forms” disputes?

Faculty

Darrell W. Pierce, Member
Dykema Gossett, Ann Arbor, Mich.

Mr. Pierce focuses his practice in the areas of commercial and corporate finance law. He has earned a national reputation for handling sophisticated debt finance transactions, including structured finance transactions, securitization of financial assets and other significant secured transactions under Article 9 of the UCC, including restructurings and workouts. Mr. Pierce is Co-Keader of the firm's Lending Team and supervises its UCC Filing Team.

Jeffrey G. Raphelson, Member
Bodman, Detroit

Mr. Raphelson focuses his practice on commercial litigation, particularly related to the automotive industry and intellectual property litigation. He also dedicates a substantial amount of time to general commercial cases such as contract disputes, finance and banking litigation, corporate governance and dissolution, dealer and franchise termination, and other corporate law disputes.


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