contract law
Hoch v. Federal Express Corp., 1991 WL 298720 (S.D.N.Y. 1991)
Study notes for Hoch v. Federal Express: professor notes, cold call prep, exam angles, and memory aids.
Under UCC § 2-207, conflicting terms in contract forms do not bind parties if a term materially alters the original agreement.
Hoch v. Federal Express illustrates the complexities of the Uniform Commercial Code (UCC) § 2-207, which governs the battle of the forms in contract formation. The key takeaway is the court's focus on whether the differing terms materially alter the contract. In this case, the arbitration clause included in Federal Express's acknowledgment was found to materially alter the agreement, preventing it from becoming part of the contract. Professors may emphasize the importance of clearly understanding both parties' terms and the UCC's recognition of competing proposals in contract law.
Additionally, this case highlights the implications of terms that could limit legal recourse, such as arbitration clauses. The court's ruling that such clauses were not part of the contract underscores the critical nature of scrutinizing terms when forming contracts, especially in transactions heavily relying on standardized forms.
Hoch Holds Arbitration Out (H.A.O.) to remember that arbitration clauses that materially alter the agreement are not binding.
| Case | Distinction |
|---|---|
| Last Shot Rule (Cloverdale Equipment Co. v. H.B. Schmidt Co.) | In Cloverdale, the last form sent controlled the agreement, whereas in Hoch, the arbitration clause was deemed a material alteration. |
| Griffin v. HPH Corp. | In Griffin, the terms were sufficiently similar to form a binding contract, unlike the distinct material alterations seen in Hoch. |
Supporting the rule promotes fairness in contract negotiation by ensuring parties cannot be bound to unexpected terms, such as arbitration, without explicit agreement.
Against the rule, it could lead to uncertainty and undermine reliance on standardized forms, complicating business transactions.
On exams, Hoch v. Federal Express can be used to test students’ understanding of UCC § 2-207, particularly in relation to conflicting terms and material alteration. Expect to analyze different scenarios involving acceptance and alterations in contract terms.