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55 Cards in this Set

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BUYER'S remedies depend on whether she _______ the goods PRIOR to acceptance or ________ acceptance she has already given.
BUYER'S remedies depend on whether she REJECTS the goods PRIOR to acceptance or REVOKES acceptance she has already given.
What type of K?

Buyer takes goods for USE but may return them EVEN IF they conform to the K.
"SALE ON APPROVAL" K: Buyer takes goods for USE but may return them EVEN IF they conform to the K.
What type of K?

Buyer takes goods for RESALE but may return them if he is unable to resell them.
"SALE OR RETURN" K: Buyer takes goods for RESALE but may return them if he is unable to resell them.
IDENTIFICATION: A designation of ________ ________ as the ones to be delivered under the K of sale.
IDENTIFICATION: A designation of SPECIFIC GOODS as the ones to be delivered under the K of sale.
COURSE OF DEALING: ________ of conduct concerning previous _________ between the parties to a transaction
COURSE OF DEALING: SEQUENCE of conduct concerning previous TRANSACTIONS between the parties to a transaction
GOOD FAITH: This is ________ IN FACT and in observance of __________ commercial standards of _______ DEALING.
GOOD FAITH: This is HONESTY IN FACT and in observance of REASONABLE commercial standards of FAIR DEALING.
GENERAL RULE: A thief CANNOT pass good title.

EXCEPTION--->A thief CAN pass good title if:

(1) The goods are _______;

(2) The goods are __________ INSTRUMENTS;

(3) The buyer has made _________ (ie. valuable improvements) to the goods; or

(4) The true owner is ________ from asserting title (e.g. if the true owner expressly/impliedly represented that thief had title).
GENERAL RULE: A thief CANNOT pass good title.

EXCEPTION--->A thief CAN pass good title if:

(1) The goods are MONEY;

(2) The goods are NEGOTIABLE INSTRUMENTS;

(3) The buyer has made ACCESSIONS (ie. valuable improvements) to the goods; or

(4) The true owner is ESTOPPED from asserting title (e.g. if the true owner expressly/impliedly represented that thief had title).
COMMON LAW--->
At common law, offers are revocable UNLESS consideration is given to keep the offer open.

UCC--->
Art. 2 modifies the common law rule for certain offers made by ________ (ie. FIRM OFFERS).
COMMON LAW--->
At common law, offers are revocable UNLESS consideration is given to keep the offer open.

UCC--->
Art. 2 modifies the common law rule for certain offers made by MERCHANTS (ie. FIRM OFFERS).
ACCEPTANCE

Generally, an OFFER to buy goods for current shipment is construed as inviting acceptance EITHER by:

(1) ________ to ship;

(2) PROMPT _________ of _________ GOODS; or

(3) PROMPT __________ of _________ GOODS.
ACCEPTANCE

Generally, an OFFER to buy goods for current shipment is construed as inviting acceptance EITHER by:

(1) PROMISING to ship;

(2) PROMPT SHIPMENT of CONFORMING GOODS; or

(3) PROMPT SHIPMENT of NON-CONFORMING GOODS.
If the offer is for something OTHER THAN the sale of GOODS (e.g. land), an acceptance proposing ADDITIONAL TERMS is a _________ and __________

o No _____ is formed
If the offer is for something OTHER THAN the sale of GOODS (e.g. land), an acceptance proposing ADDITIONAL TERMS is a REJECTION and COUNTER-OFFER

o No K is formed
ACCEPTANCE CONTAINING DIFFERENT TERMS--"KNOCKOUT RULE"

States that _________ terms in the offer and acceptance are _________ ______ of the K and the terms instead are provided by the UCC.
ACCEPTANCE CONTAINING DIFFERENT TERMS--"KNOCKOUT RULE"

States that CONFLICTING terms in the offer and acceptance are KNOCKED OUT of the K and the terms instead are provided by the UCC.
OPEN TERMS

The fact that one or more terms are left open does ____ prevent the _________ of a K if:

o Parties ________ to enter into a K; and

o There is a _________ BASIS for giving a remedy

NOTE: The ________ can supply reasonable terms for those that are missing!
OPEN TERMS

The fact that one or more terms are left open does NOT prevent the FORMATION of a K if:

o Parties INTENDED to enter into a K; and

o There is a REASONABLE BASIS for giving a remedy

NOTE: The COURT can supply reasonable terms for those that are missing!
The K is _____ enforceable beyond the _________ of goods shown in the writing.
The K is NOT enforceable beyond the QUANTITY of goods shown in the writing.
"SALE OR RETURN" K: Buyer takes goods for _______ but may return them if unable to do so.

If the goods are returned to the seller, the risk remains on the ______ while the goods are in transit.

This is a ___________ case.
"SALE OR RETURN" K: Buyer takes goods for RESALE but may return them if unable to do so.

If the goods are returned to the seller, the risk remains on the BUYER while the goods are in transit.

This is a COMMERCIAL case.
"SALE ON APPROVAL" K: Buyer takes goods for ______ but may return them EVEN IF they ________ to the K.

o The risk of loss does _____ pass to the buyer until he ________.

o If the buyer decides ____ to take the goods, return is at the ________ risk.

o This is a ___________ case.
"SALE ON APPROVAL" K: Buyer takes goods for USE but may return them EVEN IF they CONFORM to the K.

o The risk of loss does NOT pass to the buyer until he ACCEPTS.

o If the buyer decides NOT to take the goods, return is at the SELLER'S risk.

o This is a CONSUMER case.
STATUTE OF FRAUDS

A _______ is sufficient even though it _______ or _________ states a term, but the K is _____ enforceable beyond the _________ of goods shown in the writing.
STATUTE OF FRAUDS

A WRITING is sufficient even though it OMITS or INCORRECTLY states a term, but the K is NOT enforceable beyond the QUANTITY of goods shown in the writing.
"SALE ON APPROVAL"--->Seller bears ROL until buyer ______ goods following approval period.

o Applies EVEN IF goods are ________ in transit.


"SALE OR RETURN"--->Ordinary ROL rules govern (involving merchants).
"SALE ON APPROVAL"-->Seller bears ROL until buyer ACCEPTS goods following approval period.

o Applies EVEN IF goods are DESTROYED in transit.


"SALE OR RETURN"--->Ordinary ROL rules govern (involving merchants).
RIGHT OF REVOCATION OF ACCEPTANCE

The buyer may revoke her acceptance of goods if the defect:

(1) __________ impairs their VALUE to her; AND

(2) She accepted them b/c of _________ of discovering defects b/c of the seller's __________ that the goods conformed to the K.

o Revocation must occur w/i a REASONABLE TIME after buyer _________ or SHOULD HAVE ___________ the defenct AND before any __________ CHANGE in the goods NOT caused by their own defects.
RIGHT OF REVOCATION OF ACCEPTANCE

The buyer may revoke her acceptance of goods if the defect:

(1) SUBSTANTIALLY impairs their VALUE to her; AND

(2) She accepted them b/c of DIFFICULTY of discovering defects b/c of the seller's ASSURANCES that the goods conformed to the K.

o Revocation must occur w/i a REASONABLE TIME after buyer DISCOVERS or SHOULD HAVE DISCOVERED the defenct AND before any SUBSTANTIAL CHANGE in the goods NOT caused by their own defects.
A proper REVOCATION has the effect of __________.
A proper REVOCATION has the effect of REJECTION.
DE MINIMIS DEFECT

After a buyer's _________, the seller has a right to _______.


Rule--->Seller can cure if defect is:

(1) ________; and if

(2) Seller _________ expected buyer to take goods w/ defect anyway but buyer insists on perfect tender.

____ effect on perfect tender for _________ of goods. Gives time extension ONLY.
DE MINIMIS DEFECT

After a buyer's REJECTION, the seller has a right to CURE.


Rule--->Seller can cure if defect is:

(1) MINOR; and if

(2) Seller REASONABLY expected buyer to take goods w/ defect anyway but buyer insists on perfect tender.

NO effect on perfect tender for QUALITY of goods. Gives time extension ONLY.
ACCEPTANCE

(1) Buyer says "I _______";

(2) Buyer _______ to _______ w/i a reasonable time;

(3) Buyer exercises _________ over goods _________ w/ seller's ownership (ie. incorporation of raw materials).
ACCEPTANCE

(1) Buyer says "I ACCEPT";

(2) Buyer FAILS to REJECT w/i a reasonable time;

(3) Buyer exercises DOMINION over goods INCONSISTENT w/ seller's ownership (ie. incorporation of raw materials).
SELLER'S RIGHT TO CURE

Rule: A seller can cure _______ tenders ANY TIME __________ DELIVERY IS DUE UNDER THE K. The seller must give ________.
SELLER'S RIGHT TO CURE

Rule: A seller can cure DEFECTIVE tenders ANY TIME BEFORE DELIVERY IS DUE UNDER THE K. The seller must give NOTICE.
DISCLAIMER OF IMPLIED WARRANTIES--RULE OF PRIOR EXAMINATION

____ implied warranty as to ________ which an examination BEFORE contracting would have uncovered IF:

(1) Buyer ________ before purchase; or

(2) Seller ________ buyer inspect.
DISCLAIMER OF IMPLIED WARRANTIES--RULE OF PRIOR EXAMINATION

NO implied warranty as to DEFECTS which an examination BEFORE contracting would have uncovered IF:

(1) Buyer INSPECTS before purchase; or

(2) Seller DEMANDS buyer inspect.
BUYER'S NONMONEY REMEDIES--RIGHT TO SPECIFIC PERFORMANCE

Right to recover goods themselves (_________ remedy).

Specific performance is available if:

(1) Goods are ________; or

(2) "In other proper circumstances" (inability to ________).
BUYER'S NONMONEY REMEDIES--RIGHT TO SPECIFIC PERFORMANCE

Right to recover goods themselves (EQUITABLE remedy).

Specific performance is available if:

(1) Goods are UNIQUE; or

(2) "In other proper circumstances" (inability to COVER).
BUYER'S NONMONEY REMEDIES--RIGHT OF ACTION IN DETINUE

This is a right to _______ the goods themselves (________ remedy).

CASE 1:
o If seller becomes ________ w/i ____ days after buyer has paid all or part of purchase price; and

o The goods are _________ to the K;

o Buyer receives a "______ OF DETINUE"


CASE 2:
o Goods are _____ available elsewhere; and

o Goods are __________ to the K.
BUYER'S NONMONEY REMEDIES--RIGHT OF ACTION IN DETINUE

This is a right to RECOVER the goods themselves (LEGAL remedy).

CASE 1:
o If seller becomes INSOLVENT w/i 10 days after buyer has paid all or part of purchase price; and

o The goods are IDENTIFIED to the K;

o Buyer receives a "WRIT OF DETINUE"


CASE 2:
o Goods are NOT available elsewhere; and

o Goods are IDENTIFIED to the K.
BUYER IN THE ORDINARY COURSE->

(1) Buying in _______ _______;

(2) From a ________ merchant who deals in goods of the _______;

(3) W/o _________ of any violation of _________ party rights.
BUYER IN THE ORDINARY COURSE->

(1) Buying in GOOD FAITH;

(2) From a RETAIL merchant who deals in goods of the KIND;

(3) W/o KNOWLEDGE of any violation of THIRD party rights.
VOIDABLE TITLE RULE

(1) A defrauding buyer's title is _______, but

(2) The defrauding buyer has the power to transfer _______ title to a _______ ________ PURCHASER FOR ________

(3) The BFP for value from the defrauding buyer takes ______ of the ______ owner's claims.
VOIDABLE TITLE RULE

(1) A defrauding buyer's title is VOIDABLE, but

(2) The defrauding buyer has the power to transfer GOOD title to a BONA FIDE PURCHASER FOR VALUE

(3) The BFP for value from the defrauding buyer takes FREE of the TRUE owner's claims.
THE MODIFICATION PROBLEM

COMMON LAW: Modifications need _______ consideration (____ enforceable w/o consideration).

UCC: Any ______ FAITH modification is binding w/o _________ consideration.
THE MODIFICATION PROBLEM

COMMON LAW: Modifications need FRESH consideration (NOT enforceable w/o consideration).

UCC: Any GOOD FAITH modification is binding w/o ADDITIONAL consideration.
MODIFICATION + STATUTE OF FRAUDS

If the alleged modification is ______ and the K as modified is w/i SOF, it is _____ enforceable as a modification.

HOWEVER, it might be enforceable as a ________.
MODIFICATION + STATUTE OF FRAUDS

If the alleged modification is ORAL and the K as modified is w/i SOF, it is NOT enforceable as a modification.

HOWEVER, it might be enforceable as a WAIVER.
MODIFICATION: Enforceable from time of __________.

WAIVER: Only __________ enforceable (retraction allowed only before ________)
MODIFICATION: Enforceable from time of AGREEMENT.

WAIVER: Only PROVISIONALLY enforceable (retraction allowed only before RELIANCE).
THE FIRM OFFER PROBLEM

COMMON LAW: A seller can revoke an offer if there is no consideration.

UCC: A ________ offer by a _________ is binding w/o consideration.

Requirements:
o Offer must be made by a ________;

o Offer must be in _________ and signed by the _________;

o Offer must be a _______ offer (ie. by its terms gives assurances it will be held open for a specific period of time).

EFFECT: Irrevocable offer for period stated, NOT to exceed _____ MONTHS.
THE FIRM OFFER PROBLEM

COMMON LAW: A seller can revoke an offer if there is no consideration.

UCC: A WRITTEN offer by a MERCHANT is binding w/o consideration.

Requirements:
o Offer must be made by a MERCHANT;

o Offer must be in WRITING and signed by the OFFEROR;

o Offer must be a FIRM offer (ie. by its terms gives assurances it will be held open for a specific period of time).

EFFECT: Irrevocable offer for period stated, NOT to exceed 3 MONTHS.
THE OPEN TERM PROBLEM

COMMON LAW: Void for ________.

UCC: A K w/ open terms is ________ SO LONG AS the parties ________ to be bound and there is sufficient basis for providing a ________ for breach.

o Must specify _________ term.

o Code supplies _________ terms (e.g. reasonable price is market price at time of delivery, reasonable time of delivery, delivery at seller's place of business).
THE OPEN TERM PROBLEM

COMMON LAW: Void for VAGUENESS.

UCC: A K w/ open terms is ENFORCEALBE SO LONG AS the parties INTEND to be bound and there is sufficient basis for providing a REMEDY for breach.

o Must specify QUANTITY term.

o Code supplies MISSING terms (e.g. reasonable price is market price at time of delivery, reasonable time of delivery, delivery at seller's place of business).
THE ADDITIONAL TERM PROBLEM

COMMON LAW: ________ image rule
______________________________

UCC: Notwithstanding varying terms, if the ______ constitutes an ACCEPTANCE, there ____ a K.
______________________________

UCC:
o If one party is a NONMERCHANT, the terms of the __________ govern.
_____________________________

o If BOTH parties are MERCHANTS, ADDITIONAL terms are usually __________ unless:

- They ___________ ALTER the original K;

- The offer EXPRESSLY _________ ACCEPTANCE to the offer's terms; or

- The _________ OBJECTS w/i a reasonable time.
THE ADDITIONAL TERM PROBLEM

COMMON LAW: MIRROR image rule
______________________________

UCC: Notwithstanding varying terms, if the REPLY constitutes an ACCEPTANCE, there IS a K.
______________________________

UCC:
o If one party is a NONMERCHANT, the terms of the OFFER govern.
_____________________________

o If BOTH parties are MERCHANTS, ADDITIONAL terms are usually INCLUDED unless:

- They MATERIALLY ALTER the original K;

- The offer EXPRESSLY LIMITS ACCEPTANCE to the offer's terms; or

- The OFFEROR OBJECTS w/i a reasonable time.
METHOD OF ACCEPTANCE PROBLEM: COMMON LAW VS. CODE

COMMON LAW: Offer and acceptance MUST be by the ______ method.

UCC: Acceptance can be by any manner ________ under the circumstances.

UCC: Acceptance can take place by the _________ of performance. If acceptance is by performance, must give REASONABLE ___________.
METHOD OF ACCEPTANCE PROBLEM: COMMON LAW VS. CODE

COMMON LAW: Offer and acceptance MUST be by the SAME method.

UCC: Acceptance can be by any manner REASONABLE under the circumstances.

UCC: Acceptance can take place by the COMMENCEMENT of performance. If acceptance is by performance, must give REASONABLE NOTIFICATION.
REMEDIES AVAILABLE TO BOTH BUYERS AND SELLERS

(1) Right to demand ________

(2) Anticipatory ___________

(3) ___________ of repudiation

(4) Right to sue ________ parties

(5) Liquidated ________
REMEDIES AVAILABLE TO BOTH BUYERS AND SELLERS

(1) Right to demand ASSURANCES

(2) Anticipatory REPUDIATION

(3) RETRACTION of repudiation

(4) Right to sue THIRD parties

(5) Liquidated DAMAGES
BUYER'S REMEDIES

(1) ACCEPTANCE

(2) Rejection ______ to acceptance

(3) _________ of acceptance

(4) Right to ________ identified goods

(5) Right to SPECIFIC _________

(6) Buyer's damages
BUYER'S REMEDIES

(1) ACCEPTANCE

(2) Rejection PRIOR to acceptance

(3) REVOCATION of acceptance

(4) Right to REPLEVY identified goods

(5) Right to SPECIFIC PERFORMANCE

(6) Buyer's damages
SELLER'S REMEDIES

(1) Right to WITHHOLD goods

(2) Right to _______ goods

(3) Right to ______ goods on buyer and recover FULL _______

(4) Damages
SELLER'S REMEDIES

(1) Right to WITHHOLD goods

(2) Right to RECOVER goods

(3) Right to FORCE goods on buyer and recover FULL PRICE

(4) Damages
ADEQUATE _________: Those which, under the circumstances, would make a reasonable _________ believe that the promised __________ will be forthcoming.
ADEQUATE ASSURANCES: Those which, under the circumstances, would make a reasonable MERCHANT believe that the promised PERFORMANCE will be forthcoming.
Under the UCC, a buyer (in a single-order K) has the right to ______ goods if they "fail in any respect to _______ to the K."

HOWEVER, the seller has a right to cure defects IF:
o The ______ for performance has not run out and he can cure w/i that time; or

o Seller has reason to believe buyer would accept _________ goods (in which case seller can take a reasonable amount of extra time, BEYOND the time for original performance, in curing defects).
Under the UCC, a buyer (in a single-order K) has the right to REJECT goods if they "fail in any respect to CONFORM to the K."

HOWEVER, the seller has a right to cure defects IF:

o The TIME for performance has not run out and he can cure w/i that time; or

o Seller has reason to believe buyer would accept NON-CONFORMING goods (in which case seller can take a reasonable amount of extra time, BEYOND the time for original performance, in curing defects).
FIRM OFFER

A _______ offer _______ by a _________ giving assurances that it will be held open will be ________---w/o ______---for the stated period of time or for a _______ time if no period is expressly stated.

NOTE: This period of irrevocability may NOT exceed 3 MONTHS!
FIRM OFFER

A WRITTEN offer SIGNED by a MERCHANT giving assurances that it will be held open will be IRREVOCABLE---w/o CONSIDERATION---for the stated period of time or for a REASONABLE time if no period is expressly stated.

NOTE: This period of irrevocability may NOT exceed 3 MONTHS!
ADDITIONAL TERMS--K'S BETWEEN MERCHANTS

Additional terms are usually included UNLESS:

(1) They ________ alter the original K;

(2) The offer ________ limits acceptance to the terms of the _______; or

(3) The offeror _______ w/i a reasonable time.
ADDITIONAL TERMS--K'S BETWEEN MERCHANTS

Additional terms are usually included UNLESS:

(1) They MATERIALLY alter the original K;

(2) The offer EXPRESSLY limits acceptance to the terms of the OFFER; or

(3) The offeror OBJECTS w/i a reasonable time.
PAROL EVIDENCE RULE

The terms of a K that are set forth in the confirmatory memoranda of the parties or that are set forth in a writing intended as a final expression of the parties' agreement (CAN/CANNOT) be contradicted by evidence of any _______ or CONTEMPORANEOUS _______ agreement.

HOWEVER, parol evidence may be offered to show _________ modifications of a ________ K.
PAROL EVIDENCE RULE

The terms of a K that are set forth in the confirmatory memoranda of the parties or that are set forth in a writing intended as a final expression of the parties' agreement CANNOT be contradicted by evidence of any PRIOR or CONTEMPORANEOUS ORAL agreement.

HOWEVER, parol evidence may be offered to show SUBSEQUENT modifications of a WRITTEN K.
THIEF GENERALLY CANNOT PASS TITLE

If a thief steals goods from the true owner and then sells them to a buyer, he is ________ to pass title to the buyer (b/c his title is ______).

THEREFORE, even a ______ FAITH PURCHASER FOR _______ generally CANNOT cut off the rights of the true owner if the seller's title is void.
THIEF GENERALLY CANNOT PASS TITLE

If a thief steals goods from the true owner and then sells them to a buyer, he is UNABLE to pass title to the buyer (b/c his title is VOID).

THEREFORE, even a GOOD FAITH PURCHASER FOR VALUE generally CANNOT cut off the rights of the true owner if the seller's title is void.
TRUE/FALSE:

The "perfect tender rule" does NOT require a material breach in order to allow a party to reject goods.
TRUE!

The "perfect tender rule" does NOT require a material breach in order to allow a party to reject goods.
SIGNATURE: This includes any ________ executed or adopted w/ a __________ INTENTION to adopt or accept a writing.
SIGNATURE: This includes any SYMBOL executed or adopted w/ a PRESENT INTENTION to adopt or accept a writing.
FACTS: Destruction or injury to identified goods BEFORE RISK PASSES TO BUYER

Is K avoided?
YES!

Destruction or injury to identified goods BEFORE RISK PASSES TO BUYER--->

K is avoided!
STATUTE OF FRAUDS EXCEPTION

A writing signed by the party to be charged is _____ required for a SALE OF ______, EVEN IF for $500 or more IF:

(1) SPECIALLY __________ GOODS;

(2) Written __________ by a MERCHANT;

(3) _________ in court;

(4) ___________.
STATUTE OF FRAUDS EXCEPTION

A writing signed by the party to be charged is _____ required for a SALE OF ______, EVEN IF for $500 or more IF:

(1) SPECIALLY MANUFACTURED GOODS;

(2) Written CONFIRMATION by a MERCHANT;

(3) ADMISSION in court;

(4) PERFORMANCE.
GOODS: All things that are _________ when they are IDENTIFIED to the K.
GOODS: All things that are MOVABLE when they are IDENTIFIED to the K.
________ _________ SELLER: If the seller's SUPPLY of goods is ___________ (ie. he can obtain all the goods he can sell).
LOST VOLUME SELLER: If the seller's SUPPLY of goods is UNLIMITED (ie. he can obtain all the goods he can sell).
How long is the STATUTE OF LIMITATIONS for actions for breach of a SALES K?

_____ years from TIME OF _______.
STATUTE OF LIMITATIONS---SALES K

o 4 years from TIME OF PERFORMANCE
A warranty of title is given by _____ _________.
A warranty of title is given by ANY SELLER.
An implied warranty of FITNESS FOR A PARTICULAR PURPOSE is given by _____ _______.
An implied warranty of FITNESS FOR A PARTICULAR PURPOSE is given by ANY SELLER (ie. merchant or NOT).
ENTRUSTMENT

Entrustment passes ONLY the rights of the entruster.

If the entruster is NOT the ________, ownership ________ pass!
ENTRUSTMENT

Entrustment passes ONLY the rights of the entruster.

If the entruster is NOT the OWNER, ownership CANNOT pass!
SHIPMENT UNDER RESERVATION

When does buyer pay?

______ to ________ of goods
SHIPMENT UNDER RESERVATION

When does buyer pay?

PRIOR to RECEIPT of goods
MIRROR IMAGE RULE ABANDONED

Whether terms in the acceptance that are _________ FROM or IN ________ TO the offered terms will be included in the K depends on whether ________ parties are _________:

(1) K's involving NONMERCHANT----Terms of ______ govern

(2) K's between merchants---Additional terms usually __________

(3) K's between merchants---
Acceptance containing __________ terms
MIRROR IMAGE RULE ABANDONED

Whether terms in the acceptance that are DIFFERENT FROM or IN ADDITION TO the offered terms will be included in the K depends on whether BOTH parties are MERCHANTS:

(1) K's involving NONMERCHANT----Terms of OFFER govern

(2) K's between merchants---Additional terms usually INCLUDED

(3) K's between merchants---
Acceptance containing DIFFERENT terms