2.1 Contract Formation: UCC Article 2 vs. Common Law & Battle of the Forms

🎯 Essential Doctrinal Takeaways

• Hybrid transactions for goods and services are governed as a whole under the predominant purpose test.
• Under UCC § 2-205, a merchant's signed firm offer is irrevocable without consideration for the stated time, capped at 3 months.
• Promissory estoppel under Restatement § 90 enforces promises lacking consideration where foreseeable detrimental reliance occurred.
• Under UCC § 2-207(2), additional terms between merchants become part of the contract unless they materially alter it (e.g., arbitration clauses).

Contracts for the sale of goods (movable items) are governed by UCC Article 2, while contracts for real estate and services are governed by common law. In hybrid contracts involving both goods and services, courts apply the 'predominant purpose' test, examining the language of the contract, the business of the supplier, and the relative financial cost of the respective components.

Under UCC § 2-205, an offer by a merchant to buy or sell goods in a signed writing that gives assurance it will be held open is irrevocable without consideration for the time stated, or if no time is stated for a reasonable time, but in no event may the period of irrevocability exceed three months.

UCC § 2-207 fundamentally altered the common law 'mirror image' rule. Under § 2-207(1), a definite and seasonable expression of acceptance operates as an acceptance even though it states terms additional to or different from those offered. Between merchants, additional terms automatically become part of the contract unless: (a) the offer expressly limits acceptance; (b) they materially alter the contract; or (c) objection is given within a reasonable time.

⚠️ NextGen Bar Examination Traps & Pitfalls

• Applying common law option contract rules requiring separate consideration to merchant firm offers under UCC § 2-205.
• Assuming a firm offer remains irrevocable for 6 months if the writing expressly promises 6 months (the statutory cap is 3 months).
• Applying the common law mirror image rule to contracts for the sale of movable goods.