Back to the U.N. Sales Convention Differences with UCC

November 12, 2010, 07:27 PM

If, whether intentionally or inadvertently, a seller and buyer located in different “contracting states” proceed with a transaction governed by the Sales Convention, then they should be cognizant of the key differences in the governing legal standards compared to the UCC. I will summarize some of these differences over the next several posts. Battle of the Forms.In the United States, there is a time-honored commercial practice of buyers submitting purchase orders and sellers dispatching sales confirmations for the very same transaction, albeit on standard forms teeming with inconsistencies in the fine print used in the attached “terms and conditions”. Despite these conflicting terms, the UCC generally holds that a contract has been formed; the question is only which of the various inconsistent terms and conditions between the buyer’s document and the seller’s document have made their way into the “contract”. Under the Sales Convention, the result changes dramatically: i.e., for a contract to be formed, the offer and acceptance must be “mirror images” of each other as to all of the material terms of the alleged agreement, including price; payment terms; quality and quantity of the goods; place and time of delivery; extent of one party’s liability to the other; and settlement of disputes. In light of this different law of contract formation under the Sales Convention, use of pre-printed forms without obtaining the signed agreement of the opposite party can be most hazardous, especially if one may need to enforce the so-called contract at a later date. —Charles V. McPhillips