In April 2015, Attorneys Gene Libby and Tara Rich of Libby O’Brien Kingsley & Champion, LLC defended a Montana corporation in a Uniform Commercial Code arbitration brought by a Maine-based manufacturer. Attorneys Libby and Rich prevailed in arguing that the manufacturer’s boilerplate terms and conditions did not apply to the contract between the firm’s client and the manufacturer. In this case, the client had ordered goods and the manufacturer “confirmed” the order adding “standard terms and conditions.” One of those terms provided that the client would be liable for the manufacturer’s “attorney fees, expenses, and arbitration costs” if the client was found to have “breached its obligations.” A dispute arose under the contract and the manufacturer sought to recover over $100,000 in fees and costs from the firm’s client.
The arbitrator agreed with the firm’s attorneys that the standard terms were a “material alteration” of the terms of the contract under U.C.C. 2-207(2)(b), as the terms had not been accepted by the client through its silence. The arbitrator rejected the manufacturer’s claim that the provision was consistent with “trade usage” or the parties “course of performance.” The firm’s success on this pivotal argument in the case saved the client over $100,000 in fees and costs.