A theater owner and a light vendor negotiate for goods. The theater owner responds with an acceptance stating Delivery, Fixtures, and Stage Lights Sound Good, and adds installation would also be helpful. Does a binding contract exist?

• A. No, because the acceptance included a material alteration (installation).
• B. No, because price terms were not specified.
• C. No, because the vendor is a merchant and the theater owner is not necessarily a merchant.
• D. Yes, because under UCC an acceptance with additional terms can form a binding contract where the predominant purpose is sale of goods.

Answer: (D)

Under the UCC, an acceptance can include additional terms and still form a binding contract for the sale of goods, as long as the writings show a definite offer and a definite acceptance and the predominant purpose is the sale of goods. Here, the theater owner’s reply accepts delivery of fixtures and stage lights, signaling assent. The extra note about installation is an added term, not a rejection or counter-offer that would destroy the contract. Under UCC 2-207, such an acceptance can create a contract for the goods; if both parties are merchants, the additional terms usually become part of the deal unless objected to, and if not both merchants, they’re treated as proposals to be agreed on. Price terms aren’t essential at the outset because the UCC allows price to be determined later or by a reasonable price at delivery. Installation as an ancillary service doesn’t prevent formation of a binding contract for the goods, so a contract exists.