Contracts and Sales Multistate Bar Practice Exam

Under the battle of the forms, what happens if one party is a nonmerchant?

1. Additional terms become part of the contract automatically

2. Additional terms are considered counteroffers

3. Additional terms do not become part of the contract unless agreed

4. Additional terms are binding unless contested

The correct answer is: Additional terms do not become part of the contract unless agreed

In the context of the battle of the forms, when one party is a nonmerchant, additional terms do not automatically become part of the contract unless expressly agreed upon. The UCC provides different rules for merchants and nonmerchants regarding the acceptance of offers and the incorporation of additional terms. For nonmerchants, the acceptance of an offer must mirror the terms of the offer exactly. If a nonmerchant's acceptance includes additional or different terms, it does not constitute an acceptance; instead, it is treated as a counteroffer. This counteroffer effectively rejects the original offer and introduces new terms that must be specifically agreed upon by the original offeror to form a binding contract. Therefore, for nonmerchants, it is essential that both parties agree to any additional or modified terms for them to be effective within the contract. The absence of this mutual agreement means the additional terms are not part of the contract, aligning with the principles governing nonmerchant transactions under the UCC.