For construction lawyers, the Battle of the Forms presents a familiar fact pattern.  A material supplier/seller provides a potential buyer with a price quote along with its standard terms.  The buyer, usually a contractor or subcontractor, responds with a form purchase order that includes its own standard terms, which differ from the seller’s terms.  The seller then responds by shipping the goods, often with an invoice or confirmation that restates the seller’s terms.  The parties’ respective forms align on certain terms like price and quantity, but other terms differ.  Neither party ever signs the other party’s form.  The parties nevertheless conduct business with each other as if they are in agreement — the seller sells, and the buyer buys.    Later, a dispute arises, which turns on the following question: What are the terms of the contract?  In other words, whose form wins the battle?

In the case of the sale of goods, the answer to this Battle of the Forms scenario is supposed to be found by applying Section 2-207 of the Uniform Commercial Code.  That section, which has been enacted in some form in all 50 U.S. states, provides as follows:

§ 2-207. Additional Terms in Acceptance or Confirmation.

1. 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, unless acceptance is expressly made conditional on assent to the additional or different terms.
2. The additional terms are to be construed as proposals for addition to the contract. Between merchants such terms become part of the contract unless:
   • the offer expressly limits acceptance to the terms of the offer;
   • they materially alter it; or
   • notification of objection to tem has already been given or is given within a reasonable time after notice of them is received.
3. Conduct by both parties which recognizes the existence of a contract is sufficient to establish a contract for sale although the writings of the parties do not otherwise establish a contract. In such case the terms of the particular contract consist of those terms on which the writings of the parties agree, together with any supplementary terms incorporated under any other provisions of this Act.

As demonstrated by the Sixth Circuit opinion last week in BorgWarner v. Parker Hannifin, applying this analysis and arriving at an answer is not so simple.  In that case, the Sixth Circuit was presented with a typical Battle of the Forms fact pattern where neither side ever expressly agreed to the other side’s terms.  This included a price escalation clause in the seller’s quote, which became the focus of the dispute.  After 18 pages of analysis, a majority of the three-judge panel concluded that a contract existed and that the terms are the parties’ writings, where they agree, plus any default terms supplied by Ohio’s version of the UCC.  The Sixth Circuit did not rule what those terms were but remanded the case back to the trial court with perhaps as many questions as answers.   On remand, the trial court will be faced with deciding the ultimate question: who wins the battle of the forms?

A copy of the court’s opinion is here.