Solving Your Problems While Getting You Back to Business

Uniform Commercial Code Sales of Goods Section 2-207

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Attorney Minchella convinced a federal judge to deny an out-of-state company’s motion to compel arbitration in its home state of a dispute with a Connecticut company, by establishing that the seller’s purchase order terms requiring such arbitration did not become part of the parties’ agreement under the Uniform Commercial Code - a classic battle of the forms case. This allowed the litigation to proceed in Connecticut, and opened the door to a prompt resolution.

The Connecticut company purchased all of its steel requirements from a certain out-of-state manufacturer. The companies had done business for a few years with no problems. But when the manufacturer’s factory suffered a power outage, its quality control system failed and it delivered steel that did not meet the buyer’s specifications. The companies could not work out their differences and hired lawyers. The lawyers knew that the company who could win the “battle of the forms” would come out on top.

The first phase of this battle was whether or not the buyer (a Connecticut company) could sue the seller (a West Coast company) in Connecticut. The buyer’s purchase order said nothing about where a lawsuit could be brought, but the seller’s acknowledgement form said no lawsuit could be filed at all, and all disputes had to be arbitrated in California. After battling out which terms from which form constituted the “agreement,” the court ruled that the buyer had never agreed to the fine print terms on the back of the seller’s form, and the buyer’s lawsuit (in Connecticut, its home state) proceeded to a prompt and beneficial settlement.