Background and Facts C. Mahendra (N.Y.), LLC, is a New York wholesaler of loose diamonds. National Gold & Diamond Center, Inc., is a California seller of jewelry. Over a ten-year period, National placed orders, totaling millions of dollars, with Mahendra by phoning and negotiating the terms. Mahendra shipped diamonds "on memorandum" for National to examine. Mahendra then sent invoices for the diamonds that National chose to keep. Both the memoranda and the invoices stated, "You consent to the exclusive jurisdiction of the . . . courts situated in New York County." When two orders totaling $64,000 went unpaid, Mahendra filed a suit in a New York state court against National, alleging breach of contract. National filed a motion to dismiss the complaint for lack of personal jurisdiction, contending that the forum-selection clause was not binding. The court granted the motion. Mahendra appealed.

Defendant argued the forum-selection clause in the * * * memorandums was not binding because its president never signed the memorandums' terms and conditions. Defendant thus maintained that it had not signed or agreed to the forum-selection clause, nor had it otherwise consented to being sued in New York. Likewise, defendant asserted that because it had negotiated for and ordered the diamonds from California and did not sign or agree to the forum-selection clause, the consent to jurisdiction contained in the memorandums would materially alter the parties' agreements in contravention of UCC 2-207(2)(b). Thus, defendant concluded, it was not bound by the unsigned provision on the back of the * * * memorandums. * * * * * * * The [lower] court found the forum-selection clause invalid, noting that defendant did not sign the invoices. The court further found that under UCC 2-207(2), forum-selection clauses are additional terms that materially alter a contract, and must be construed as mere proposals for additions to the contract. Thus, the court concluded, the forum-selection clause was non-binding absent an express agreement. Indeed, the court noted, the complaint did not allege that defendant affirmatively expressed consent, either orally or in writing, to the forum-selection clause when it retained the invoices. * * * * The [lower] court correctly found that defendant is not bound by the forum-selection clause on plaintiff's invoices. UCC 2-207 contemplates situations like the one here, where parties do business through an exchange of forms such as purchase orders and invoices. As the parties did here, merchants frequently include terms in their forms that were not discussed with the other side. UCC 2-207(2) addresses that scenario, providing, "the additional terms are to be construed as proposals for addition to the contract. Between merchants such terms become part of the contract unless: * * * (b) they materially alter it." [Emphasis added.] Here, during telephone discussions, the parties negotiated the essential terms required for contract formation, and the invoices were merely confirmatory. Thus, the forum-selection clause is an additional term that materially altered the parties' oral contracts, and defendant did not give its consent to that additional term. Decision and Remedy A state intermediate appellate court agreed that "the forum-selection clause is an additional term that materially altered the parties' . . . contracts, and defendant did not give its consent to that additional term." But the court reversed the dismissal of Mahendra's complaint on the ground that National's phone calls with Mahendra were sufficient contacts to subject the defendant to personal jurisdiction in New York under the state's long-arm statute.

Critical Thinking Legal What is Mahendra's best argument that the forum-selection clause was, in fact, binding on National? Discuss.