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Battle of Forms Exercise - Terms and Conditions of Sale

Battle of Forms Exercise

The materials on the Battle of Forms provide a scenario with related documents. All the materials are in the Additional Content area for Week 6. Start a thread here to provide your answer to the exercise.

Please note that I do not need your analysis of the outcome any potential litigation. What I am looking for is what terms and conditions apply and why. No research papers needed here, just a paragraph on how you reached your conclusion.

 One of the key discussions this week, and potentially the most confusing, is what is often called the "battle of the forms." Our legal focus will be on UCC 2-207 (http://www.law.cornell.edu/ucc/2/2-207.html) entitled "Additional Terms in Acceptance or Confirmation." Before you do anything else, READ UCC 2-207. Keep in mind, too, that this section is focused on dealings between "merchants." From there, I'm going to challenge your contract analysis skills.

Scenario References:

a. RFQ Form (attached)

b. "RTI Purchase Order Terms and Conditions" (attached)

c. "ESS Terms and Conditions of Sale" (http://www.ess.elwd.com/OrderAcknowledgement.cfm)

The Typical Scenario: Really Terrific Installations ("RTI") issues a a Request for Quotation (see attached example) for $500,000 of Grade 304L stainless steel. The RFQ form (in fine print on the back of the form) includes RTI's standard terms and conditions.

Ellwood Speciality Steel Company ("ESS") issues its quotation that include the attached "Terms and Conditions of Sale." Negotiations ensue on price, quantity, delivery, inspection and testing, and delivery schedule. RTI issues its purchase order for the order which include RTI's own "Purchase Order Terms and Conditions."

In response, ESS issues its PO acknowledgment form which, not suprisingly, again includes ESS' "Terms and Conditions of Sale." The contract (if there is one) calls for 5 deliveries over a 6 month period.

Disputes Break Out: RTI's inspection of the third delivery using "non-destructive testing" (NDT) reveals that the steel delivered contains numerous impurities and microscopic cracks which make the steel unfit for its intended use.

RTI panics, and samples the prior deliveries (some of which is already in use) and finds similar results. RTI informs ESS of these defects, and demands replacement of all deliveries made to date along with the cost to RTI to rework items already produced with defective steel.

ESS does its own NDT and, much to RTI's surprise, denies that there are any defects or that such defects, even if present, would bar use of the steel in RTI's intended use. Negotiations break down, the lawyers are called, and YOU have been assigned to analyze the terms of the contract with ESS to see what if any remedies RTI has here.

Battle of Forms Exercise - Terms and Conditions of Sale

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