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The Title 28 of the United States Code QUESTION #3714
Question 1
A merchant sends a signed purchase order to a manufacturer for 1,000 widgets at $\text{\$5}$ each. The manufacturer sends back a signed acknowledgment form that says, 'We accept, but all disputes must be settled by arbitration in New York.' The original order was silent on arbitration. Under UCC 2-207 (Battle of the Forms), is the arbitration clause part of the contract?
  • No, because it is a 'material alteration.'✔️
  • Yes, because both parties are merchants and the merchant did not object.
  • No, because the manufacturer's form was a counter-offer.
  • Yes, because the manufacturer's signature makes it a 'firm offer.'
Correct Answer Explanation
Under UCC 2-207, between merchants, additional terms become part of the contract unless they materially alter it. Courts generally hold that an arbitration clause is a material alteration.