One of the key discussions this week, and potentially the most confusing, is what is often called the amp;battle of the forms.amp; Our...

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 Conf irmation." 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. "RT I 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

exam ple) 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 Condition s 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

acknowledg ment 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" (N DT) 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.