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Martin Silver is a practicing attorney with offices in Hauppauge, N.Y. He was a flooring installer before and during the time he went to law school and has since represented numerous industry people and companies. To contact him, call 631-435-0700.



2/18/2009
1:06:26 PM 
So sue me (but not here)

A wise dealer or distributor will always send the supplier a written purchase order stating his understanding of just what his is buying. And, most large sellers will, upon receipt of the order, send back a confirmation or acknowledgment of an order. This written confirmation describes exactly what the manufacturer believes he is selling.

In the typical transaction, however, if we were to compare the buyer's written purchase order with the seller's, we would find many contradictions.

One recent case points out just how complicated these matters can get. This transaction took place between a large local dealer and an English manufacturer. It involved the dealer's purchase of certain goods from the English exporter. The dealer, apparently receiving sound legal advice, confirmed the purchase by sending his written purchase order to the manufacturer. In addition to the specifics of this particular order, the form contained several preprinted terms determining the appropriate way to settle a dispute.

Upon receipt of this purchase order, the English manufacturer sent back a form confirming the order. This form also contained certain preprinted clauses. Some of these, listed under the heading "Conditions of Contract" specifically stated that any disputes arising from the sale must be submitted for determination before an arbitrator, in England, through the use of English Law.

There was an obvious disagreement as to how a dispute could, or must, be settled.

After the goods were delivered, the dealer notified the manufacturer that he believed the goods were defective and not as they were warranted to be. The mill disputed this, and the dealer sued the manufacturer in a New York Court for the return of his money.

The manufacturer defended this lawsuit, in part, upon the basis that the "Contract of Sale" specifically stated all such disputes could only be submitted to an English arbitrator in England and must be decided under English law. After all, isn't that what was specifically stated on its confirmation as a "Condition of Contract?"

The New York Court was now faced with deciding which preprinted form was in fact the "contract" between the parties. To do this the court looked to the New York law contained in the Uniform Commercial Code and noted the following language:

"(1) A definite and seasonable expression of acceptance or a written confirmation which is sent within a reasonable time operates as an acceptance even though it states terms additional to or different from those offered or agreed upon, unless acceptance is expressly made conditional on asset to the additional or different terms.

(2) The additional terms are to be construed as proposals for addition to the contract. Between merchants such terms become part of the contract unless: (a) the offer expressly limits acceptance to the terms of the offer; (b) they materially alter it, or (c) notification of objection to them has already been given or is given within a reasonable time after notice is received..."

Since the buyer's purchase order specifically limited the acceptance to the terms of the purchase order, and, since the court found a clause to arbitrate all claims in England under English law did, in fact, "materially alter" the terms of the purchase order, this court decided the additional, inconsistent terms of the English confirmation were not binding on the New York buyer and that the lawsuit could be maintained in New York.

Obviously, this decision was extremely important to the New York dealer. He won it only because he conducted his business in a commercially professional manner. You should do no less.




Edited by Admin 2/18/2009
1:07:44 PM

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11:05:49 PM

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