Wednesday, December 25, 2013

Commerce & Industry Insurance Co. v. Bayer Corp. case brief

Commerce & Industry Ins. Co. v. Bayer Corp. case brief summary
742 N.E.2d 567 (2001)

Defendant seller of commercial materials appealed the denial of its motion to compel arbitration and to stay further litigation in a dispute arising from a battle of the forms sale, in which both plaintiff buyer and defendant seller each attempted to consummate a commercial transaction through the use of their own preprinted forms, from the Superior Court Department, Essex (Massachusetts).

Plaintiff purchased goods from defendant. With each purchase, plaintiff sent defendant pre-printed purchase orders that contained an arbitration clause. With each order it filled, defendant sent plaintiff a pre-printed invoice that stated that defendant did not accept any additional or conflicting terms contained in the purchase orders. When a dispute arose and plaintiff brought suit, defendant sought to compel arbitration under plaintiff's purchase order arbitration clause, and appealed when the superior court found the clause unenforceable.


  • The supreme court affirmed. 
  • Because of the express clause in its invoice, the arbitration clause never became part of the agreement. 
  • The parties had no prior course of dealing using arbitration, and the agreement between the parties only came into effect under Mass. Gen. Laws ch. 106, § 2-207(3) where subsequent conduct demonstrated that the parties believed that a binding agreement had been formed. 
  • That limited the provisions of the agreement to those actually agreed to.

The order denying the motion to compel arbitration and to stay litigation was affirmed because the contact was formed by the actions of the parties under the Uniform Commercial Code; thus a written provision compelling arbitration contained in plaintiff buyer's purchase orders never became part of the agreement, and was unenforceable.

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