Peckar & Abramson’s Texas lawyers won an appeal before the Court of Appeals for the Ninth District of Texas, entitling their client to recover consequential damages and rejecting the defendant’s argument that its proposal’s terms and conditions were part of the contract.  The case affirms long-standing contract principles under the Uniform Commercial Code (“UCC”) and state common law.

Contractors regularly rely on the UCC when using Purchase Orders but may take for granted whether certain terms are part of the contract until a dispute arises.  The UCC under section 2-206 broadly states an offer may be accepted in any manner, but this broad language may not apply if a proposal (i.e., offer) requires a signature or acceptance by specific means.

UCC 2-206 is often overlooked because parties jump to arguing over 2-207, commonly known as the “battle of the forms.”  But formation of the contract is a party’s first line of defense.  The Texas Court of Appeals relied on federal case law in upholding the trial court’s summary judgment and agreed with P&A’s client that the proposals at issue, including their terms and conditions, were not accepted.  As a result, the defendant’s argument that their express waiver barred consequential damages fails, and P&A’s client may recover millions for their loss.

The appellate decision was issued on February 15, 2024, Automated Ingredient Sys., L.L.C. v. Hiller Carbon, LLC, No. 09-23-00028-CV, 2024 Tex. App. LEXIS 1209 (Tex. App.—Beaumont Feb. 15, 2024, no pet. h.)