The common law mirror image rule tells us that to form a contract the terms of the acceptance should match the terms of the offer. This rule intuitively makes sense: if A offers to sell B a blue car for $1,000 and B says he accepts the offer for one red bicycle for $250 the parties did not reach an agreement. B isn’t “accepting” the offer, he is completely changing the offer.
But the drafters of the Uniform Commercial Code (UCC) were concerned that when two business people enter into a transaction sometimes the offers and acceptances don’t match up 100% but a court should not allow either party to walk away from the deal – – the UCC favors forming a contract. Also, the UCC was concerned with circumstances where parties form a contract by conduct, and the party who sent the last form was always able to dictate the terms of the contract.
UCC 2-207 provides:
(1) A definite and seasonable 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. contract. Between merchants such terms become part of the contract unless:
(a) the offer expressly limits acceptance to the terms of the offer;
(b) they materially alter it; or
(c) notification of objection to them has already been given or is given within a reasonable time after notice of them is received.
What does this mean? In a contract for the sale of goods, if there are additional terms in the acceptance, we still have a contract. The additional terms become proposals for addition to the contract.
If we have two merchants — persons in the business of buying and selling the goods involved in the transaction – – the additional become part of the contract. The additional terms become part of the contract unless one of the three exceptions listed in (a) – (c) applies.
Let’s focus on (b) for this post. The additional term becomes part of the contract if the additional term does not materially alter the offer. A material change would mean a a big or important change to the terms of the offer.
For example, let’s say A offers to sell B a tractor for $20,000. B says he agrees to the deal but adds an additional term: a standard warranty period that most businesses apply. A court is likely to say that B’s additional term did not materially alter the contract. The warranty period would become part of the contract unless A objects. B’s acceptance did not precisely mirror the offer but we have a contract for the tractor.
You can watch a more detailed series of videos here.
Below is a more introductory video discussing this modification of the mirror image rule: