Gecko Corp. sent Watson Co. a purchase order for 100 Watson compasses for $2,500. Watson accepted Gecko's offer by sending back an acknowledgment form. However, Watson added a clause providing for interest on any overdue invoices pertaining to the sale, a practice that is standard within the industry. If Watson and Gecko are both merchants and the parties do not communicate further about the terms, a contract is formed that includes Watson's additional term regarding interest.

Question

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This is UCC 2-207 battle of the forms case.  The interest clause is not a change in fundamental terms, so a contract has been formed between the parties. Both the seller and the buyer are stated to be merchants. In these circumstances, the new terms automatically become part of the contract unless: 1) the new terms materially alter the contract; 2) the other side objects within a reasonable time; or 3) the original offer stated that no new terms would be allowed. None of these exceptions apply in particular, a provision that is standard within the industry is unlikely to be viewed as a material alteration).