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always silent as to ancillary issues such as insurance, warranties, etc.In determining which terms were agreed to, a court will start by looking at the characteristics of the proposal. The initial offer, based upon its language, can be either revocable or irrevocable. Revocable offers do not contain a speciÞ c period for which they can be accepted and can be withdrawn by the seller at any time prior to the purchaserÕs acceptance. On the other hand, irrevocable offers are open for a set period of time, such as thirty days, and canÕt be revoked or modiÞ ed by the seller during that period. This offer must be accepted during the acceptance period for the terms of the offer to be applicable. At the end of the term, the offer expires and the seller is under no obligation to provide the equipment or services on the terms included in the proposal. In the event that the purchaser responds to the offer during the acceptance period and provides slightly different terms, but does not address several others, the non-addressed terms will probably be included as part of the agreement. For example, if the proposal provides for two units of equipment, price, payment in thirty days and that purchaser is responsible for shipping costs but the purchase order provides for the purchase of three units of equipment at the agreed upon price and is silent as to all other terms. A court would likely Þ nd that the purchaser agreed to the other terms and only requested a modiÞ cation of the agreement as to the number of units. Thus, the purchaser will probably be responsible for shipping costs and a payment term of thirty days as the terms were included in the original offer and not modiÞ ed by the purchaser. Purchasers are often surprised by the inclusion of these terms.If the purchase order is not exchanged during the acceptance period, the terms of the original offer expire. Often, due to the delays inherent in the procurement process, the purchase order is transmitted after the acceptance period included in the offer expires. In this case, a court will consider the purchase order as a counter offer that was provided by the purchaser to the seller. If the seller agrees to provide the product pursuant to those terms, the terms included in the purchase order provide the full scope of the agreement. Using the example above, assuming that the purchase order was issued after the offer expired, the only applicable terms relate to the number of units and price. Terms such as warranties, shipping costs, etc. would be left to the various gap Þ lling provisions outlined by the law. This scenario usually surprises the seller. CONTRACT MANAGEMENT The best way to avoid the issues related to this battle of the forms is to implement a system where each proposal is reviewed and the purchase process managed by one person who is trained to analyze these details. Once a proposal is provided, this employee should be tasked the assignment of looking the proposal over, including the Þ ne print on the back page, and determining whether the terms are acceptable and what needs to be done to either accept or modify the terms. Once the terms are ironed out, the procurement process can be turned over to the accounting or purchasing department to complete the order / payment process once an agreement is reached. www.marinelink.com MN 21MN Feb2013 Layout 18-31.indd 21MN Feb2013 Layout 18-31.indd 211/30/2013 4:48:22 PM1/30/2013 4:48:22 PM
