Facts: Bayway Refining and Oxygenated Marketing and Trading A.G. (OMT) were both in the business of buying and selling petroleum products. Bayway agreed to sell OMT 60,000 barrels of gasoline, and OMT faxed a confirmation letter stating that it represented the full understanding of the parties. The next day, Bayway faxed its own confirmation letter, which stated that the document canceled and superseded any other correspondence. Bayway’s fax incorporated by reference Bayway’s own “General Terms and Conditions.”  Those general terms were not sent with the fax, but were available for OMT to examine if it wished. One of those terms stated that the buyer would be responsible for any federal taxes.

OMT, which never objected to the “general terms,” received the gasoline but refused to reimburse Bayway for the federal taxes, which amounted to $464,035. Bayway sued. OMT claimed that the tax clause materially altered the contract and, under section 2-207, never became part of the agreement. The District Court gave summary judgment for Bayway, and OMT appealed

Questions:

1. Was the tax clause a material alteration of the contract?

2. What is the disputed clause?

3. Which party proposed this term?

4. When did OMT first see the tax clause?

5. But Bayway sent a fax confirming the agreement. Didn’t that fax contain the tax clause?

6. What does “incorporate by reference” mean?

7. You mean that OMT can supposedly agree to terms it never saw?

8. Isn’t that crazy? 

9. Doesn’t the mirror image rule preclude a contract here?

10. Under 2-207, the offeree might include additional terms or different terms. What is the distinction between those terms?

11. Which are we dealing with here, different or additional terms?

12. Additional terms become part of the contract between the parties except in three cases. What are they?

13. Which is at issue here?

14. The court holds that OMT has the burden of proof. What does that mean?

15. What must OMT demonstrate to prove material alteration?

16. How does OMT fare in proving surprise and hardship?