Flender Corp. v. Tippins Int'l, Inc. - 2003 PA Super 300, 830 A.2d 1279

Rule:

The Superior Court of Pennsylvania joins the majority of courts that have considered the issue under 13 Pa. Cons. Stat. § 2207 in declaring that differing terms between a § 2207 offer and acceptance are properly subject to the "knockout" rule.

Facts:

The parties each attempted to impose different terms in the contract. The purchaser's offer had an arbitration clause. However, the seller did not sign that offer, but shipped the goods and then sent an invoice with its own terms that did not include arbitration. The seller brought suit and the trial court denied the purchaser's objection which sought arbitration, holding that the arbitration clause was only a part of the offer, but was never a part of the contract. The trial court also found that the contract between the parties was formed through course of conduct, pursuant to § 2207(c) of the Pennsylvania Commercial Code, 13 Pa. Cons. Stat. § 2207(c). The purchaser appealed. 

Issue:

Did the trial court err as a matter of law in determining that no valid agreement to arbitrate existed between the parties?

Answer:

No.

Conclusion:

On appeal by the purchaser, the court reviewed the applicability of the various subsections of § 2207 in arriving at the resolution of the disputed terms. The court adopted the "knock out" rule, holding that due to the difference in terms, which were not necessarily "additional" terms discussed in § 2207(b), those terms that conflicted in the offer and invoice "knocked" each other out. Accordingly, no arbitration clause remained in the agreement between the parties and the denial of the request to compel arbitration was proper.