Hoch v. Federal Express Corp., 1991 WL 298720 (S.D.N.Y. 1991)
Under UCC § 2-207, when parties exchange forms with conflicting terms, which terms control the contract - particularly when one form contains an arbitration clause?
Under UCC § 2-207 (battle of the forms), when parties exchange forms with different or additional terms, a contract is formed based on the terms on which the forms agree. Additional or different terms in the acceptance become proposals for addition to the contract. Between merchants, additional terms become part of the contract unless: (1) the offer expressly limits acceptance to its terms, (2) they materially alter the contract, or (3) the offeror objects within a reasonable time. Arbitration clauses are generally considered material alterations.
The court held that the arbitration clause in Federal Express's acknowledgment did not become part of the contract because it materially altered the agreement. Therefore, the parties were not bound to arbitrate and litigation could proceed.
Hoch is a leading case on UCC § 2-207 and the battle of the forms, illustrating how courts handle conflicting terms in commercial transactions. The case demonstrates that arbitration clauses are material alterations that don't automatically become part of a contract. It's essential for understanding modern commercial contracting and shows the practical application of § 2-207 in resolving which terms govern when merchants exchange forms with different provisions.