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Contracts/Variant Acceptances

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3. Browne & Assoc., a San Francisco company, orders from U.S. Electronics, a New York company, ten thousand electronic units. Browne & Assoc.'s order form provides that any dispute would be resolved by an arbitration panel located in San Francisco. U.S. Electronics executes and delivers to Browne & Assoc. its acknowledgment form, which accepts the order and contains the following provision: "All disputes will be resolved by the State courts of New York." A dispute arises concerning the workmanship of the parts, and Browne & Assoc. wishes the case to be arbitrated in San Francisco. What result?

4. Explain how the result in problem 3 might change if the U.S. Electronics form contained any of the following provisions:

(a) "The seller's acceptance of the purchase order to which this acknowledgment responds is expressly made conditional on the buyer's assent to any or different terms contained in this acknowledgment."
(b) "The seller's acceptance of the purchase order is subject to the terms and conditions on the face and reverse side hereof and which the buyer accepts by accepting the goods described herein."
(c) "The seller's terms govern this agreement-this acknowledgment merely constitutes a counteroffer."

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Solution Summary

Concerning contracts/variant acceptances, this solution provides the best response and explanation for two multiple choice questions.

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Answer #3: Variant Acceptances. The matter should be arbitrated in San Francisco. The common law "mirror image" rule, by which the acceptance can not vary or deviate from the terms of the offer, is modified by the code. Section 2-207 provides:

(1) A definite and reasonable 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:
(a) ...

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