110 F.3d 184 (1st Cir. 1997)
The case of Ionics, Inc. v.
Does the limitation of liability clause in Elmwood's acknowledgment form become part of the contract under UCC 2-207?
Under UCC Section 2-207, an acceptance or written confirmation containing additional or different terms is considered a valid acceptance, unless it contemplates expressly conditional assent. The additional terms become part of the contract unless: (a) the offer expressly limits acceptance to the terms of the offer; (b) they materially alter the contract; or (c) notification of objection has already been given or is given within a reasonable time after notice of them is received.
The First Circuit held that Elmwood's limitation of liability clause was not part of the contract as it materially altered the offer presented by Ionics.
This case is significant as it exemplifies how courts interpret UCC 2-207 with a strict view regarding additional terms in business contracts. For law students and practitioners, understanding this case is critical in navigating and drafting agreements where conflicting terms exist. It serves as a cautionary reminder to explicitly outline agreements and negotiate terms clearly before proceeding with the contract to prevent unilateral enforcement of unfavorable conditions.