Substrate Record: qid 1446

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qid 1446 · law

Question: Question 13. A buyer sent a signed letter to a seller that stated: "Ship 100 boxes of nails at $3 per box, the price quoted in your circular." The seller mailed the buyer a signed form acknowledgment that agreed to the buyer's terms and stated on the reverse side: "Disputes regarding quality shall be arbitrated." The buyer did not reply to the seller's acknowledgment, and the seller shipped the nails. When the buyer received the nails, it found their quality to be unsatisfactory and sued the seller for breach of warranty. The seller has asked an attorney whether the parties' contract requires arbitration of the buyer's claim. What is the best advice the attorney can provide?

1. A contract was formed when the buyer received the nails, but the arbitration term is not valid as it was not explicitly agreed upon by the buyer.
2. A contract was formed pursuant to conduct when the buyer received the nails, and a court would exclude the arbitration provision from the contract.
3. A contract was formed when the seller mailed its acknowledgment, and the arbitration term must be accepted by the buyer because it was included in the acknowledgment.
4. No contract exists, because the arbitration term in the seller's acknowledgment was a new term that was not in the original agreement.
5. No contract exists, because the arbitration term in the seller's acknowledgment created a counteroffer that the buyer never accepted.
6. A contract was formed when the buyer sent the letter, and the arbitration term is not valid because the buyer didn't agree to it.
7. A contract was formed when the seller mailed its acknowledgment, and the court must decide whether the arbitration term should be excluded as a material alteration of the contract.
8. A contract was formed when the seller mailed its acknowledgment, and the arbitration term automatically became part of the contract because the buyer didn't object.
9. A contract was formed when the seller mailed its acknowledgment, and the arbitration term became part of the contract. arbitration term became part of the contract.
10. No contract exists, because the buyer didn't respond to the seller's acknowledgment.

Our answer: G. A contract was formed when the seller mailed its acknowledgment, and the court must decide whether the arbitration term should be excluded as a material alteration of the contract. Source quote machine-checked (exact quote)

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