Morrison Construction purchased a poured concrete form from Century 21 Concrete

Question

Morrison Construction purchased a poured concrete form from Century 21 Concrete Forms, Inc. Morrison purchased the concrete form by placing a phone call to Century 21 in Madison, Wisconsin. Century 21 delivered the concrete form with an invoice stating the terms of the sale required payment within 30 days and a 1½% interest per month finance charge would be charged on accounts over 30 days. When Morrison failed to pay the invoice on time, interest was charged according to this rate. Later, Morrison refused to pay the accumulated interest charge, claiming there was not a meeting of the minds regarding the finance charge in any conversation prior to the sale. The trial court concluded that the finance charge was in fact an additional term added by Century 21 when it accepted Morrison's purchase order. Discuss Uniform Commercial Code Section 2-207 in general and with regard to this situation. Does Morrison owe the interest accrued?

Explanation / Answer

Uniform Commercial Code Section 2-207 with regards to this situation -

Additional terms acceptance or confirmation

1> A perfect expression of acceptance or a written confirmation which is sent in a time will be considered as an acceptance of additional terms.

2> The additional terms are constructed as proposals for addition to the contract. But such terms will be considered unless:-

3> Conduct by two parties represents the contract which is not sufficient to establish the contract for sale until there is no written acceptance. In such case, the particular terms of the contract which both parties are accepted and given writing as for acceptance, with other supplementary terms can be included in other provisions of this Act.

Does Morrison owe the interest accrued?

No, Morrison does not owe the interest accrued. As at the time of purchasing he has not been told about the terms of the finance charge. The most important thing is he has not sent any acceptance in written after getting the invoice with the finance charge terms.

That's why according to the Uniform Commercial Code Section 2-207 Morrison is not responsible for giving the finance charge.

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