Written by attorneys · grounded in primary & secondary sources — see below
in contract law
An additional provision proposed or agreed upon during contract formation or interpretation. Between merchants such a term in an acceptance becomes part of the contract unless the offer limits acceptance to its own terms, the term materially alters the agreement, or the recipient objects.
Sources & Authorities· 4 primary sources
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Uniform Acts
Restatements
How it applies
Common Examples
6
Merchant Forms Add Warranty Term
Atlas Ventures sent a purchase order for components to Apollo Energy that contained no warranty language. Apollo Energy replied with an acknowledgment adding a one-year warranty. Because both parties were merchants and the warranty did not materially alter the deal, the warranty term entered the contract.
Oral Upgrade Promise Barred by Integration
North Utilities and Union Renewable signed a detailed power-purchase agreement containing an integration clause. During negotiations Union Renewable had orally promised to fund interconnection upgrades, but the writing omitted any reference to funding. The court excluded evidence of the oral promise because the writing was completely integrated.
Aaron Adams ordered a computer from Aurora Biotech. The box arrived containing terms that included an arbitration clause. Adams kept the computer for more than thirty days, thereby accepting the arbitration term as part of the contract.
Hill v. Gateway 2000, Inc.105 F.3d 1147 (7th Cir.1997)
Trade Usage Supplements Quantity Term
Nanakuli Paving contracted with Shell Oil for asphalt. The writing specified a fixed quantity, yet local trade usage allowed buyers to demand price protection. Evidence of that usage was admitted to supplement the written quantity term.
Nanakuli Paving & Rock Sales, Inc. v. Shell Oil Co.664 F.2d 772 (9th Cir. 1991)
Arbitration Agreement Lacks Mutuality
Aisha Ahmed signed an employment agreement containing an arbitration clause that required her to arbitrate all claims but allowed the employer to litigate certain disputes. The court refused to enforce the clause because the lack of mutuality rendered the agreement unconscionable.
Armendariz v. Foundation Health Psychcare Services, Inc.24 Cal.4th 83, 114 (2000)
Copyright Term Extended by Statute
Alexandra Armstrong held copyrights in several musical works. Congress enacted a statute that lengthened the copyright term for existing works. The extension applied to Armstrong's copyrights even though they had been granted under the prior statutory duration.
Eldred v. Ashcroft537 U.S. 186
Common questions
Frequently Asked
2
When do additional terms in an acceptance become part of a contract between merchants?+
Between merchants an additional term in an acceptance becomes part of the contract unless the offer expressly limits acceptance to its own terms, the term materially alters the offer, or the offeror objects. The term is treated as a proposal if any exception applies.
Supporting sources
How does the parol evidence rule treat consistent additional terms?+
Evidence of a consistent additional term is admissible to supplement an integrated agreement unless the court finds the writing completely integrated. A completely integrated writing discharges prior or contemporaneous agreements within its scope.
Supporting sources
537 U.S. 186Property
…term of 14 years from the work's publication, renewable for an additional 14 years if the author survived and applied for an additional term. § 1. Congress retained that approach in subsequent statutes. See Stewart v. Abend , 495 U.S. 207, 217 (1990) ("Since the earliest copyright statute in this country, the copyright term of…