Southwest Engineering Co. v. Martin Tractor Co.
Citation and Court
Southwest Engineering Co. v. Martin Tractor Co., 205 Kan. 684 (Kan. 1970)
Facts
Southwest Engineering and Martin Tractor had oral negotiations resulting in an agreement for the sale of a generator set. Their written communications (purchase order and acknowledgment) included conflicting terms—each party’s form contained different warranty and payment terms. The parties performed under the agreement, but a dispute arose and Martin Tractor claimed no binding contract existed because the written forms did not match.
Issue
Whether a contract was formed despite conflicting terms in the parties’ written forms, and if so, what terms govern the contract.
Holding
The Kansas Supreme Court held that a contract was formed based on the oral agreement and the parties’ conduct in performing, and that any open terms not agreed upon were supplied by UCC gap-filler provisions.
Rule / Doctrine
Under UCC Article 2, a contract for the sale of goods may be formed even though the parties’ forms contain conflicting terms, if the parties’ conduct shows they intended to form a contract. Where terms are left open or are knocked out by conflicting forms, the UCC supplies reasonable gap-filling terms (price, delivery, etc.) to complete the agreement.
Significance
Illustrates the UCC approach to the battle of the forms and gap-filling. Demonstrates that under UCC § 2-204, a contract may exist even if its terms are not fully worked out, and courts will supply missing terms rather than hold that no contract was formed. Contrasts with the common law mirror image rule.