In the situation you going to read bellow , if an additional term is objected to by the offeror merchant within a reasonable time after acceptance, what have the parties agreed toif anything?

So we've seen some of the problems that arise when we apply the mirror image rule-- the so-called battle of the forms problem, a rather unhealthy situation. So the good news is that for goods, what we've just illustrated no longer applies. The authors of the Uniform Commercial Code have suggested and the state legislatures have promulgated section 2-207.

Unfortunately, that's also the bad news. And if you weren't sure just how bad the news is, bear with me. I'll show you. We're going to read it. Now, don't get scared here. You are responsible for the Uniform Commercial Code. When I mention something in class or there's something in the assigned readings, you need to try to read it. You need to try to understand it. And I'm going to take you through here so that we can understand it together.

But just don't start reading the UCC on your own, because if you do so and you try to operate a motor vehicle or heavy machinery, it can be dangerous to your health. Watch. So turn to section 2-207. We're going to read it together.

Section one. A definite and seasonable expression of acceptance or a written confirmation which is sent within a reasonable time operates as an acceptance, even though it states terms additional to or different from those offered or agreed upon, comma. Let's stop there. We've got enough in our mouth. We're going to choke if we try to understand more than that.

So what did we just say? What's all those words? What it really is saying is the mirror image rule is dead. We no longer have to worry about the mirror image rule with respect to goods. Notice that this is for merchants, nonmerchants-- as long as there's goods involved, the mirror image rule is not necessary.

So what does it mean? It means that if there is an offer and there is a response that looks like an acceptance and walks like an acceptance and quacks like an acceptance, it's an acceptance, even though it includes terms that are different or additional. So the onus is now on the offeree to decide, does he want the deal or does he want his terms?

If from a business point of view the terms are literally a deal breaker, then he needs to be very, very careful, because he can still make a counter offer. A counter offer, you say? How so? Well, let's return to the comma.

Comma, unless acceptance is expressly made conditional on assent to the additional or different terms. So what that means is if the offeree wants to make a counter offer, he needs to do so expressly. Now, what does that mean? Well, the code doesn't tell us what expressly means. As with a lot of things involving 2-207-- and in fact, a lot of things in statutory interpretation generally-- the statute only takes us so far.

You then need to have litigation. And that litigation may be different in different states. More about that later. But the key thing here is, what do we need to do?

My suggestion to you if you were in this situation is don't be cute. If you want to make a counter offer, make it very clear. I sometimes think about taking a baseball bat and hitting the offeror between the eyes with the baseball bat.

In other words, state, I will only accept if you accept my terms, and here they are. Very, very clear. Clearly a counter offer. But if you try to get too close to the line-- if you try to come up with something that looks like an acceptance, but includes additional different terms, it will be an acceptance. And as an acceptance, the question then becomes, well, what happens to those additional or different terms?

OK, I hope you're still with me, because now we're going to go to section two. All right, section two starts off easy enough. The additional terms are to be construed as proposals for additions to the contract. OK. So notice in subsection one, there were two different types of terms-- additional terms and different terms.

Here in subsection two, we're speaking only about additional terms. So these additional terms are just proposals, meaning if the offeror says, that's a great proposal. I love that proposal. Let's make it part of our contract. Let's welcome it in. Fine. It's now part of the contract.

Remember, the contract was already made back in subsection one. Everything's pretty easy to hear. Now we get to the part that's really kind of hard. Now, I know this is hard to do, wherever you may be. But if we were together, I would say what we need to do is sort of hold hands. Because we are about to jump from the frying pan into the fire.

These next words are really hard. And there's been a lot of dispute about what they mean, but I think we can understand it. Let's read together. Between merchants, such terms become part of the contract, unless-- and then there's a, b, c. Just stop here. Forget about a, b, c for the moment. Let's just take these words one at a time.

First of all, between merchants. Now, nothing else in 2-207 talks about merchants. It's only this sentence. So everything else applies to merchants and nonmerchants alike. But here we need two merchants. Such terms means such additional terms. Not different terms, only additional terms. Such terms become part of the contract unless-- huh.

Now, I really don't know what the authors of the code were thinking when they wrote this thing. Maybe they were smoking something. I don't know what was going on. But this is a very, very strange statute. I have my own way of trying to explain this. If this helps you, fine. Think about the contract as having a front door and a back door.

The front door of the contract that's got steps coming up and it's got a nice little place to walk in, it's the front door. That's where offer and acceptance meet. And offer and acceptance would have met in this situation, that goes back to the very first decision point. And that is, what was the response? Did I take the deal and accept, or did I insist upon my terms and make a counter offer?

If I accepted, what happens to these additional terms? The answer is, the way the code is written, these additional terms can sneak around and somehow find their way into the contract that's already been made through what I like to think of as the backdoor.

It's peculiar, because the contract has been formed, but yet it morphs. It evolves after being made. Again, this is very strange. So what can we do about keeping these additional terms out? Well, now we come to a, b, c of section 2-207. a, the offer expressly limits acceptance to the terms of the offer.

This is the most important part, because if you are a merchant or if you represent a merchant in any way, you want this in every goods offer. The original offer should have said, if you come back with an acceptance that includes an additional term, we are rejecting it. We are not accepting that. It will not come in unless or until we specifically agree to it in signed writing signed by an authorized party.

Bingo, boom boom. You've put a bar, a lock, a burglary alarm on the back door. Nothing's coming in, because you locked it upfront. That's what you want to do. That will save you a lot of money. Second, b. If that's not there, they materially alter it. They materially alter it?

In other words, if the additional term is not a little term, it's a big term. It materially alters the whole contract. In that case, it won't fit through this little door. It's a big term. But how do you measure terms? Lots of money here. Lots of lawyer time. Lots of litigation. You want to avoid that. How do you avoid it? By locking the door and putting the alarm on in the first place, back in subsection a.

Let's go onto subsection three. Notification of objection to them has already been given or is given within a reasonable time after notice of them is received. So what you could do if you buy my analogy is you could put a bouncer at the back door. And the bouncer's job is to read all the fine print. And if he finds any additional terms in the back of that acceptance that he doesn't like, he can quickly shoot off a statement that says, we don't want. We're going to take that additional term and throw it out into the alley behind the house.

We're not going to let it in. We're going to keep it out. Like trying to get into a club, you're not going to get in. But who's going to sit there and read everything? And if you do object, you have to do so within a reasonable time. Now, what does it mean to object within a reasonable time?

Remember, this is not a rejection, because the contract's already been formed back at the front door. This is just keeping out the additional terms. But if you fail to do it within a reasonable time, you have a contract that simply would include those additional terms that sort of snuck in. I hope you can see this is a real mess.

There are many, many questions here that are not answered. What is the difference between an additional term and a different term? It's an undefined. What is an express counter offer, back in subsection one? Undefined. What is a reasonable time in which to object? And what is a term that will materially alter the agreement, too big to get in the back door? Undefined.

Well, when things are undefined, you need litigation to help define it. And since this is generally state law, that litigation occurs in many, many states, including sometimes in the federal courts. If you do a run on section 2-207 in one of the search engines like LexisNexis, you will find-- I did this this morning-- that there were 924 references. 924 cases. I think 2-207 should have a subtitle, the Lawyer Full Employment Act.

So there are things that you can do to lower your risk of litigation-- understanding 2-207 and understanding how to limit your liability for these legal costs by following what we just talked about. I know this is hard, but I know you can do it.