C. Itoh & Co. v. Jordan Int’l Co.
552 F.2d 1228
Author: Jim

Facts: P sent D a purchase order for steel coils.  D sent back acknowledgement form which contained additional terms and stated that seller’s acceptance is expressly conditional on buyer’s assent to the additional terms. One of the additional term was an arbitration term.  P never assented to these additional terms but D shipped the steel and P accepted.  P sued claiming that steel was infected and was shipped late. D moved to say the proceeding pending arbitration, but this motion denied.

Issue: Was the arbitration clause part of the K?

Holding: No

Rationale: Under UCC 2-207(1), D’s acceptance clearly conditional.  Since P did not assent to the additional terms, no K created by the forms.  But under 2-207(3), K can be made by the conduct of the parties. D shipped the goods and A accepted. But under 2-207(3), “the terms of the particular contract consist of those terms on which the writings of the parties agree, together with any supplementary terms incorporated under any other provisions of the act.”  The parties clearly did not agree on the arbitration clause and this clause cannot fall under the supplementary terms part.  Supplementary terms “are limited to those supplied by the standardized gap fillers provision of Article two.” This ruling does not discriminate against the sellers because seller had the choice to not ship items when P refused to assent.  But seller shipped the goods anyways and now has to pay the price.