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Steiner v. Mobil Oil Corp.
20 Cal. 3d 90 (Cal. 1977)
Tobriner
In this case, over one year after apparently accepting plaintiff's
offer, the Mobil Oil Corporation sought to impose upon plaintiff the very contractual
terms which plaintiff expressly rejected in his offer. As justification for its conduct,
Mobil asserted that the crucial provision of plaintiff's offer was lost in the labyrinth
of the Mobil bureaucracy, and thus that Mobil decisionmakers had no opportunity to pass on
plaintiff's offer as such. As we shall see, however, the trial court correctly concluded
that section 2207 of the California Uniform Commercial Code
bars Mobil from in this way converting its own error into plaintiff's misfortune.
Section 2207, subdivision (1), provides that parties may form an
agreement, even if the terms of offer and acceptance do not entirely converge, if the
offeree gives a definite expression of acceptance, and if the terms of acceptance do not
explicitly condition agreement upon the offeror's consent to the offeree's new proposed
terms. In this case, as the trial court found, defendant Mobil did not condition its
acceptance of plaintiff's offer upon plaintiff's agreement to Mobil's alteration of
plaintiff's offer and thus a contract was formed. Section 2207, subdivision (2), provides
in turn that, if the terms of the offer and acceptance differ, the terms of the offer
become part of a contract between merchants if the offer expressly limits acceptance to
its own terms, or if the varying terms of the acceptance materially alter the terms of the
offer. As the trial court found, under either of these clauses, the terms of
Steiner's offer must prevail, because Steiner's offer was expressly conditional upon
Mobil's agreement to provide a guaranteed discount, and Mobil's substitution of a discount
terminable at its discretion materially affected Steiner's interests.
Accordingly, the trial court did not err in granting judgment for
plaintiff, and we shall thus affirm its judgment.
1. The facts in this case
Defendant Mobil Oil Corporation, in appealing from a judgment for
plaintiff Steiner, does not challenge the facts as found by the trial court, but rather
confines itself to an attack on the trial court's conclusions of law. The facts in
this case, thus, are not in dispute.
Joseph R. Steiner is an independent service station operator. He
purchases the gasoline which he sells from Mobil, but, except for any incidental rights
which the gasoline contract confers, Mobil owns no interest in Steiner's property.
In 1971, the third party who leased the service station property to
Steiner informed him that the property was for sale. Steiner contacted Mobil sales
representative Tony Montemarano. Montemarano informed Steiner that Mobil would not
purchase the property, but that Mobil was interested in assisting Steiner in making the
purchase.
Thereafter, Steiner entered into extended negotiations with J. S.
Chenen, Mobil's area manager and Montemarano's superior. Steiner and Chenen agreed that
Mobil would supply the down payment on the property, amounting to $30,000. In return,
Steiner would enter into a 10-year contract with Mobil. The contract would treat the cash
advance as a prepaid competitive allowance, to be amortized over the 10-year period
through Steiner's purchase of 5.8 million gallons of gasoline.
The negotiations did not terminate with the agreement concerning the
down payment. Steiner had concluded that he would not be able to do business successfully
if he were compelled to purchase gasoline from Mobil at the standard tank wagon price. As
the trial court found, Steiner told Chenen that he, Steiner, "needed a firm
competitive allowance for the length of his distributor's agreement to make his cash flow
adequate to meet the payments on the property." Steiner and Chenen agreed that a
satisfactory arrangement with Mobil would include not only the $30,000 prepaid competitive
allowance, but also a further competitive allowance reducing Mobil's tank wagon price by
1.4 cents per gallon. Mobil would also supply Steiner with $3,000 worth of improvements.
As Chenen made clear to Steiner, neither Chenen nor his immediate
supervisor, district manager D. L. Dalbec, possessed the authority to accept the
negotiated terms on Mobil's behalf. The negotiations therefore did not culminate in an
agreement as such but rather in a proposal to be submitted to R. D. Pfaff, the division
general manager, who did possess authority to agree to the proposal on Mobil's behalf.
Moreover, the proposal did not take the form of a documented single
contract. Chenen and Steiner utilized a series of standard Mobil forms in putting together
the proposal, modifying the forms where necessary. Steiner signed those of the
forms, such as the basic retail dealer contract, which required his signature. The package
of documents which comprised the proposal, therefore, needed only Pfaff's approval to
become effective.
Near the close of the process of negotiating and assembling the
proposal, Steiner obtained a copy of the standard Mobil form which would embody the 1.4
cents per gallon competitive allowance. This form, which did not require Steiner's
signature, stated: "This allowance may be changed or discontinued by us at any time
upon notice to you in writing . . . ." Upon receipt of the form Steiner immediately
contacted Chenen by telephone, told Chenen that he would not go ahead with the deal if
Mobil could revoke the competitive allowance at any time, and demanded assurances that no
such revocation would occur.
In order to placate Steiner, Chenen, after consultation and
authorization from Dalbec, sent Steiner a letter, dated December 2, 1971, which declared
"[ para. ] The ten year Retail Dealer Contract dated December 15, 1971, effective
January 1, 1972, is signed by you on the basis that Mobil grant a $30,000 Prepaid
Competitive Allowance, and a $.014 Competitive Allowance at time of delivery. [ para. ] If
Mobil management does not accept in full the above conditions outlined in your competitive
offer, the above mentioned contract will be void." (Italics added.)
The trial court found that "Chenen was authorized by Mobil to
write the letter" to Steiner. Moreover, as the trial court also found, because of the
letter, "through . . . Chenen and Dalbec Mobil had both knowledge and notice" of
Steiner's demand for a guaranteed competitive allowance. "Mobil had reason to know
that the transaction and agreement would be materially affected and that plaintiff would
not enter therein if [the guaranteed discount] term was not part of the 'package.'"
The trial court further concluded that, for Chenen and Dalbec, the transmission of
Steiner's offer to division general manager Pfaff "was part of their regular
duties" and thus that Chenen and Dalbec "were obligated, in the exercise of good
faith and ordinary care and diligence, to communicate the substance of plaintiff's [offer]
to Pfaff."
In fact, however, Chenen and Dalbec did not transmit to Pfaff the
letter which Chenen had sent to Steiner; Mobil's copy of that letter remained in the
district office files. In preparing the proposal for submission to Pfaff, Chenen and
Dalbec assembled a package which included the various documents that Steiner had executed,
the standard form providing the revocable 1.4 cents per gallon competitive allowance, and
various memoranda explaining the advantages of the deal for Mobil. Early in 1972, several
months after Chenen and Dalbec had transmitted the proposal to him, Pfaff approved it as
submitted.
Chenen informed Steiner of Pfaff's approval by telephone. Steiner had
called Chenen to find out what was happening with the proposal which they had negotiated.
Chenen told Steiner that Mobil had a check for him, and that the next thing for Steiner to
do was to open an escrow account and proceed with the purchase of the property.
Subsequently, Montemarano delivered to Steiner at his service station a
manila folder containing the documents approved by Pfaff. These documents, the trial court
found, were "numerous and complex in nature." Nonetheless, there was no cover
letter describing the contents of the folder. Although the folder included Mobil's
standard competitive allowance form, with its clause providing for revocation at will,
Montemarano did not call this fact to Steiner's attention.
Thus, as the trial court found, at no time after Chenen sent Steiner
the December 2 letter "did Mobil advise [Steiner] that a non-cancellable allowance
would not be part of the agreement." Moreover, Steiner "did not at any time
reread all of the documents delivered to him by Mobil, particularly the form letter . . .
setting forth the provision regarding the 1.4 cents per gallon competitive allowance being
cancellable." Mobil did not "specifically bring" to Steiner's attention
"the statements made in the form letter . . . concerning the cancellable condition of
the competitive allowance."
By April 1972, Steiner had completed the process of acquiring the
service station property. Beginning in March, Mobil afforded Steiner the benefit of the
1.4 cents per gallon competitive allowance in billing him for gasoline and continued to do
so until the summer of 1973. On July 16, 1973, Chenen informed Steiner by letter that, in
accordance with the provisions of Mobil's notice of competitive allowance, Mobil would reduce Steiner's discount to 0.5 cents per
gallon as of August 1, 1973.
Steiner brought this suit in the Los Angeles County Superior Court,
seeking declaratory and monetary relief. The trial court, sitting without a jury,
found that Mobil "had reason to know" that Steiner would not enter into an
agreement unless Mobil agreed that he "was to have a non-cancellable . . .
competitive allowance . . . to run as long as the distributor agreement was in
force." Moreover, the trial court found, in returning the package of documents to
Steiner, "Mobil intended to make a contract, not to make a counter offer." The
trial court concluded that "in the exercise of good faith and reasonable care and
diligence Mobil was required to specifically bring to the attention of plaintiff the
statements made in the form letter sent by Dalbec concerning the cancellable condition of
the competitive allowance."
The trial court ruled that, under California Uniform Commercial Code
section 2207, Mobil had entered into a contract with Steiner which guaranteed Steiner a
1.4 cents per gallon discount for 10 years. "Mobil made a definite and seasonable
expression of acceptance of plaintiff's offer, although its reply contained a material
term different from that offer." Moreover, "[in] accepting plaintiff's offer
Mobil did not either orally or in writing expressly condition its acceptance upon
plaintiff's assent to the different terms as to the competitive allowance in Mobil's
acceptance." The trial court granted Steiner a declaratory judgment to that effect,
and awarded Steiner damages of $4,953.63. Mobil appeals
the trial court's judgment.
2. Under California Uniform Commercial Code section 2207, Steiner's
contract with Mobil grants Steiner a 1.4 cents per gallon discount for the duration of the
contract.
Neither Mobil nor Steiner disputes the trial court's conclusion that
the sales provisions of the California Uniform Commercial Code apply in this case.
Moreover, Mobil and Steiner do not challenge the trial court's conclusion that the outcome
of this case turns on the applicability of section 2207. As we shall see, the relevant
provisions of that statute confirm the trial court's conclusion that Mobil breached its
agreement with Steiner when it unilaterally reduced Steiner's competitive discount.
Initially, we shall identify the considerations which underlie section 2207 and thus
structure our interpretation of the statute. Thereafter, we shall proceed to the
application of section 2207 itself.
Under traditional common law, no contract was reached if the terms of
the offer and the acceptance varied. "In order to make a bargain it is necessary that
the acceptor shall give in return for the offeror's promise exactly the consideration
which the offeror requests." (1 Williston, The Law of Contracts (1st ed. 1920) § 73,
p. 128 [italics added].) This "mirror image" rule of offer and acceptance was
plainly both unfair and unrealistic in the commercial context. "The fact that the
parties did intend a contract to be formed and both had a reasonable commercial
understanding that the deal was closed, is ignored." (Murray, Intention Over Terms:
An Exploration of UCC 2-207 and New Section 60, Restatement of Contracts (1969) 37 Fordham
L.Rev. 317, 319.)
Section 2207 rejects the "mirror image" rule. (See e.g.,
Roto-Lith, Ltd. v. F. P. Bartlett & Co. (1st Cir. 1962) 297 F.2d 497, 500.) "This
section of the Code recognizes that in current commercial transactions, the terms of the
offer and those of the acceptance will seldom be identical." (Dorton v. Collins &
Aikman Corp. (6th Cir. 1972) 453 F.2d 1161, 1166.)
Under section 2207, for example, the parties may conclude a contract
despite the fact that, after reaching accord, they exchanged forms which purport to
memorialize the agreement, but which differ because each party has drafted his form
"to give him advantage." (White & Summers, Uniform Commercial Code (1972) p.
23; see, e.g., Rite Fabrics, Inc. v. Stafford-Higgins Co., Inc. (S.D.N.Y. 1973) 366
F.Supp. 1.) Similarly, the parties may form a contract even if the terms of offer and
acceptance differ because one or the other party, in stating its initial position, relies
upon "forms drafted to cover the majority of [its] transactions in a uniform,
standard manner" (Duesenberg & King, Sales and Bulk Transfers under the Uniform
Commercial Code (1976) § 3.02, p. 3-9), and subsequently fails to amend its form to
reflect the deal which the other party claims was actually negotiated.
In place of the "mirror image" rule, section 2207 inquires
as to whether the parties intended to complete an agreement: "Under this Article a
proposed deal which in commercial understanding has in fact been closed is recognized as a
contract." (§ 2207, Cal. U. Com. Code, com. 2.) If the parties intend to contract,
but the terms of their offer and acceptance differ, section 2207 authorizes a court to
determine which terms are part of the contract, either by reference to the parties' own
dealings (see § 2207, subds. (1), (2)), or by reference to other provisions of the code.
(See § 2207, subd. (3).)
Section 2207 is thus of a piece with other recent developments in
contract law. Instead of fastening upon abstract doctrinal concepts like offer and
acceptance, section 2207 looks to the actual dealings of the parties and gives legal
effect to that conduct. Much as adhesion contract analysis teaches us not to enforce
contracts until we look behind the facade of the formalistic standardized agreement in
order to determine whether any inequality of bargaining power between the parties renders
contractual terms unconscionable, or causes the contract to be interpreted against the
more powerful party, section 2207 instructs us not to refuse to enforce contracts until we
look below the surface of the parties' disagreement as to contract terms and determine
whether the parties undertook to close their deal. Section 2207 requires courts to put
aside the formal and academic stereotypes of traditional doctrine of offer and acceptance
and to analyze instead what really happens. In this spirit, we turn to the application of
section 2207 in this case.
Section 2207, subdivision (1), provides: "A definite and
seasonable expression of acceptance or a written confirmation which is sent within a
reasonable time operates as an acceptance even though it states terms additional or
different from those offered or agreed upon, unless acceptance is expressly made
conditional on assent to the additional or different terms."
In this case, as the trial court found, Mobil provided "[a]
definite and seasonable expression of acceptance." Steiner offered to enter
into a 10-year dealer contract with Mobil only if Mobil, among other things, agreed to
advance Steiner $30,000, and to give Steiner a 1.4 cents per gallon competitive discount
on the price of Mobil gasoline for the duration of the contract. When Steiner telephoned
Chenen, Mobil's employee, to inquire as to the fate of Steiner's offer, Chenen told
Steiner that Mobil had a check for him, that he should open an escrow account, and that he
should go ahead with the purchase of the service station property -- in context a clear
statement that Mobil had approved the deal.
Moreover, through Montemarano, another Mobil employee, Mobil returned
to Steiner various executed documents in an envelope unaccompanied by any cover. The
documents provided written confirmation of the deal. The fact that Mobil returned the
documents without in any way calling Steiner's attention to them is further evidence that
Mobil regarded the process of negotiation as over and the deal as complete.
As the trial court also found, Mobil did not in any way make its
acceptance "expressly . . . conditional" on Steiner's "assent to the
additional or different terms." Chenen, in telling Steiner to go ahead with the
purchase, did not suggest that Mobil had conditioned its acceptance. In returning the
executed documents, Mobil enclosed no cover letter; again, it did not use the occasion in
any way to condition expressly its acceptance.
Thus, neither of the restrictions which limit section 2207, subdivision
(1)'s application are relevant in this case. Despite the fact that the terms of
Mobil's acceptance departed partially from the terms of Steiner's offer, Mobil and Steiner
did form a contract. To determine the terms of this contract, we turn to section 2207,
subdivision (2).
Section 2207, subdivision (2), provides: ". . . additional terms
are to be construed as proposals for addition to the contract. Between merchants such
terms become part of the contract unless: [ para. ] (a) The offer expressly limits
acceptance to the terms of the offer; [ para. ] (b) They materially alter it; or [ para. ]
(c) Notification of objection to them has already been given or is given within a
reasonable time after notice of them is received."
Under section 2207, subdivision (2), Mobil's revocable discount
provision does not become part of the agreement between Steiner and Mobil. In order to
become part of the agreement, Mobil's provision must not fall within any of the categories
defined by section 2207, subdivision (2), subsections (a), (b), and (c). Mobil's term,
however, clearly comes within subsections (a) and (b).
Subsection (a) provides that no additional term can become part of the
agreement if Steiner's offer "expressly [limited] acceptance to the terms of the
offer." (§ 2207, subd. (2)(a).) Mobil concedes that Steiner's offer provided that
the competitive allowance of 1.4 cents per gallon would run for the full length of the
10-year dealer contract. Chenen's December 2 letter to Steiner explicitly acknowledges
Mobil's awareness that "[if] Mobil management does not accept in full the above
conditions outlined in your competitive offer, the above mentioned contract is void."
Moreover, Mobil's acceptance falls within subsection (b) since without
question the acceptance "materially [altered]" the terms of Steiner's offer.
(See § 2207, subd. (2)(b).) The Uniform Commercial Code comment notes that a variation is
material if it would "result in surprise or hardship if incorporated without express
awareness by the other party . . . ." (§ 2-207, U. Com. Code, com. 4.) Here, Steiner
clearly indicated to Mobil in the course of the negotiations that, without the 1.4 cents
per gallon discount, he could not economically operate the service station. Mobil's
alteration, therefore, amended the terms of the offer to Steiner's significant detriment;
accordingly, the alteration was necessarily "material."
To reiterate, subsections (a), (b), and (c) of section 2207,
subdivision (2), operate in the alternative. If any one of the three subsections applies,
the variant terms of an acceptance do not become part of an agreement. Here, as we have
seen, the provisions of both subsections (a) and (b) are met. Mobil's declaration that the
1.4 cents per gallon discount was terminable at Mobil's discretion did not become part of
the contract. Instead, Steiner and Mobil formed a contract incorporating the terms of
Steiner's offer: Under this contract, Steiner was guaranteed a 1.4 cents per gallon
discount throughout the 10-year period of the dealer contract. n5
Thus, on their face, subdivisions (1) and (2) of section 2207 confirm
the trial court's conclusion that Mobil breached its agreement with Steiner. We now turn
to Mobil's opposing argument that we should adopt an interpretation of section 2207 which
conflicts with the trial court's conclusion.
3. Contrary to Mobil's argument, California Uniform Commercial Code
sections 2204 and 2207 do not incorporate the traditional rule that parties to a contract
must mutually assent to all essential terms.
We set forth Mobil's contentions, which, although elaborately
developed, can be simply stated. Section 2207 does not apply if the general contract
formation rules of section 2204 are not met. Section 2204 does not change the traditional
rule that, in order to create an enforceable contract, the parties must mutually assent to
all essential terms of the supposed agreement. In order to square section 2207 with
section 2204, Mobil argues, we must construe section 2207, subdivision (1), to provide
that there is no "definite" acceptance unless the parties agree to all essential
terms. Moreover, Mobil contends, we must also hold that, under the same section, an
acceptance which alters an essential term of an offer is an acceptance "expressly
made conditional on assent" to the variant term. Finally, Mobil concludes that, since
its acceptance, in changing the duration of the discount, modified an essential term of
Steiner's offer, i.e., price, we must find that Steiner cannot claim a continued discount.
As we shall explain, Mobil's arguments do not survive scrutiny. The
official comments accompanying section 2204, other provisions of the code, and the case
law interpreting section 2204, all support the conclusion that section 2204 does not
require mutual assent to all essential terms. Mobil's interpretations of the definite
agreement and conditional acceptance provisions of section 2207, subdivision (1), likewise
conflict with other subdivisions of section 2207.
a. California Uniform Commercial Code section 2204 does not incorporate
the traditional requirement of mutual assent to all essential terms.
Section 2204 incorporates three
subdivisions. The third of these subdivisions directly refutes Mobil's claims.
"Even though one or more terms are left open a contract for sale does not fail
for indefiniteness if the parties have intended to make a contract and there is a
reasonably certain basis for giving an appropriate remedy." (§ 2204, subd. (3).)
Section 2204, subdivision (3), does not, by its terms, require parties
to a contract to assent to all essential terms. Instead, this provision states that a
court, if it is to enforce a contract, must first make two findings. Initially, the court
must find some basis for concluding that the parties engaged in a process of offer and
acceptance, rather than inconclusive negotiations. Second, the court must find that it
possesses sufficient information about the parties' incomplete transaction to apply the
provisions of the California Uniform Commercial Code which fill in the gaps in parties'
contracts. n7 As we have already seen, both of these
minimal requirements are met in this case: the parties did not engage in inconclusive
negotiations, and section 2207 readily fills in the terms of their contract.
To overcome the literal language of section 2204, subdivision (2),
Mobil argues that the traditional requirement of "a meeting of the minds upon the
essential features of the agreement" is so fundamental that the code could not
conceivably have rejected it. The California code comment, however, explicitly states:
"'[A] meeting of the minds on the essential features of the agreement' is not
required . . . ." (§ 2204, com. 2.)
Other code provisions sustain the comment's view. As we have already
pointed out, section 2207, subdivision (2)(b), expressly acknowledges the possibility that
parties may reach a contract without agreeing to all "material" terms. Mobil
does not attempt to distinguish "material" from "essential" terms; in
any event, we do not think that it could successfully do so. Section 2305, subdivision
(1), provides an even more dramatic refutation of Mobil's argument. As we have noted,
Mobil treats price as an "essential" term. Nonetheless, this section states:
"The parties if they so intend can conclude a contract for sale even though the price
is not settled." (§ 2305, subd. (1).)
The case law interpreting section 2204 reinforces the interpretation
offered by the code comment and the implication of other code provisions: the rules of
contract formation under the California Uniform Commercial Code do not include the
principle that the parties must agree to all essential terms in order to form a contract.
Courts have held that, under section 2204, subdivision (3), parties may form a contract
even though they do not agree as to the terms of payment (Southwest Engineering Co. v.
Martin Tractor Co. (1970) 205 Kan. 684 [473 P.2d 18, 23-24]), the time or place for
performance (Taunton v. Allenberg Cotton Company, Inc. (M.D.Ga. 1973) 378 F.Supp. 34, 39),
or the quantity of the goods sold (City of Louisville v. Rockwell Manufacturing Co. (6th
Cir. 1973) 482 F.2d 159, 164) -- all terms which might appear to be "essential"
to an agreement.
More significantly, in view of Mobil's emphasis on the essential
character of price terms, a number of courts have held that, under section 2204,
subdivision (3), the parties may frame a contract without fully agreeing as to price.
Concededly, one court has suggested in dictum that section 2204, subdivision (3),
incorporates the requirement of assent to essential terms. (See Blackhawk Heat. & P.
Co., Inc. v. Data Lease Fin. Corp. (Fla. 1974) 302 So.2d 404, 408.) We think, however,
that the Delaware Supreme Court stated the prevailing view: "[The] omission of even
an important term does not prevent the finding under [section 2204, subdivision (3)] that
the parties intended to make a contract." (Pennsylvania Co. v. Wilmington Trust Co.
(1960) 39 Del.Ch. 453, 463 [166 A.2d 726].)
b. California Uniform Commercial Code section 2207, subdivision (1),
should not be narrowly read to conform to the principle of mutual assent to all essential
terms.
As we have seen, section 2204 quite clearly does not incorporate the
rule that parties must mutually assent to all essential terms. Mobil has thus failed to
establish the premise that it would postulate as justifying a narrow reading of section
2207, subdivision (1). We shall, however, briefly consider Mobil's other and further
arguments concerning the construction of section 2207, and show that these arguments,
taken in isolation, are consistent neither with the language of section 2207, subdivision
(1), nor with the logic of section 2207 as a whole.
Initially, Mobil focuses on section 2207, subdivision (1)'s requirement
of a "definite . . . expression of acceptance." Mobil would define
"definite" by reference to the extent of the difference between offer and
acceptance: the more significant the divergence, the less definitely a response is an
acceptance. This construction suffers from two flaws. First, in section 2207,
subdivision (1), "definite" modifies "expression" and not
"acceptance," and thus refers to the process of offer and acceptance and not to
the terms of the acceptance itself. Second, in any event, section 2207 as a whole bars any
interpretation of "definite" which, as Mobil urges, would exclude from the ranks
of acceptances all but collateral variations on the terms of offers. Section 2207,
subdivision (2)(b)'s concern with material variations necessarily implies that acceptances
incorporating such variations can satisfy the requirements of subdivision (1).
Mobil would also construe the final clause of section 2207, subdivision
(1), which provides that, if acceptance "is expressly made conditional on assent to .
. . additional or different terms," the "acceptance" does not operate as an
acceptance but as a counteroffer. Specifically Mobil argues that we should read this
provision broadly, by adopting the interpretation advanced in Roto-Lith, Ltd. v. F. P.
Bartlett & Co., supra, 297 F.2d at page 500: "a response which states a condition
materially altering the obligation solely to the disadvantage of the offeror is an
'acceptance . . . expressly . . . conditional on assent to the additional . . .
terms.'"
Again, however, Mobil's construction does not accord with the language
of the section. Such an interpretation of the conditional acceptance clause would
transform acceptances into counteroffers without regard to whether the acceptance is in
fact, as section 2207, subdivision (1), requires, "expressly made conditional on
assent to . . . additional or different terms." Moreover, under Mobil's reading, the
conditional acceptance clause of section 2207, subdivision (1), would largely duplicate
the function of the material variation clause of section 2207, subdivision (2)(b).
As Mobil concedes, courts and commentators alike have repeatedly
criticized the Roto-Lith interpretation of section 2207, subdivision (1). Most
courts have rejected Roto-Lith, and have instead interpreted the conditional acceptance
clause literally, as we did earlier. Recognizing the superiority of the majority view, we
reject Mobil's attempt to advance the Roto-Lith interpretation of section 2207,
subdivision (1).
4. Conclusion.
In this case, as we have seen, the trial court correctly concluded that
under section 2207 the guaranteed discount included in the terms of Steiner's offer, and
not Mobil's standard revocable discount provision, became part of the agreement between
Mobil and Steiner. Mobil cannot assert as a defense the failure of its own bureaucracy to
respond to, or even fully recognize, Steiner's efforts to modify the standard Mobil dealer
contract.
The judgment is affirmed.