Article Stub: Finding Offerors under 2-207
[I'm planning to write a series of posts I'll call article stubs - the germs of papers I'll likely never write. Dan Markel might - or more likely might not - approve. I used to talk about these pre-draft ideas with him, and he mercifully steered me off most of them before they saw the light of day. In his honor, here's a bad idea. Feel free to tell me so.]
UCC 2-207, the battle-of-the-forms provision, is famously a mess. White and Summers describe it as “an amphibious tank that was originally designed to fight in swamps, but was sent to fight in the desert.” That’d be even more accurate if you replaced “tank” with “Ford Pinto.” Complexities about. (Check out this fabulous flowchart produced by one of my students, which provides one path through the maze.) But even if you work your way through the various intricacies of the provision, resolving debates about the meaning of “expressly made conditional,” and the “knock-out rule,” a deep policy problem lurks: who, exactly, is the offeror?
The question is important because, although the provision was designed to account for a flurry of forms, it clearly privileges those forms which come first-in-time, typically finding the first mover to be an offeror. Unfortunately for the second mover (which can be a nano-second slower online) the merchant offeree’s additional terms are incorporated into the contract only if they are immaterial. Most terms that you’d care to litigate about are material. Summers and White point out that avoiding first form favoritism is an important policy goal, but proceed by privileging that first form as the offer anyway. (See the 4th edition of their Hornbook, p. 32, n.3) We can see the importance of the choice clearly by pairing Hill (offeror is the firm) with Klocek (offeror is the consumer). But the cases stand uneasily against each other, because the key analytic move (who goes first and why) is buried — to be fair, less so in Klocek than in Hill. (I’m sweeping broadly here, and avoiding knock-out complications.)
At some level, this confusion is unavoidable — 2-207 is a badly drafted mess. But in particular here, the problem is that although important consequences flow from making one or the other party the offeror, the Code provides no guidance in making that choice – it doesn’t even use the word offeror in the section. Doctrine would be marginally more clear if we made the decision as to who is the offeror explicitly a policy choice. Courts might, for example, make sellers offerors because they bear default liability burdens (warranty, nondelivery) under the UCC. Or courts could empower buyers because they typically initiate transactions, thereby spurring commerce. Or make the choice depend on some kind of rough information-forcing default allocation. The key realization is that 2-207 buries the lede, and that courts which simply follow the provision leave us in the dark.