Because Collins & Aikman’s acceptances were not expressly conditional on the buyer’s assent to the additional terms within the proviso of Subsection 2-207(1), a contract is recognized under Subsection (1), and the additional terms are treated as “proposals” for addition to the contract under Subsection 2-207(2). Since both Collins & Aikman and The Carpet Mart are clearly “merchants” as that term is defined in Subsection 2-104(1), the arbitration provision will be deemed to have been accepted by The Carpet Mart under Subsection 2-207(2) unless it materially altered the terms of The Carpet Mart’s oral offers. T.C.A. Section: 47-2-207(2) (b) [UCC Section: 2-207(2) (b)]. We believe that the question of whether the arbitration provision materially altered the oral offer under Subsection 2-207(2) (b) is one which can be resolved only by the District Court on further findings of fact in the present case. If the arbitration provision did in fact materially alter The Carpet Mart’s offer, it could not become a part of the contract “unless expressly agreed to” by The Carpet Mart. T.C.A. Section: 47-2-207 [UCC Section: 2-207], Official Comment No. 3.
We therefore conclude that if on remand the District Court finds that Collins & Aikman’s acknowledgments were in fact acceptances and that the arbitration provision was additional to the terms of The Carpet Mart’s oral orders, contracts will be recognized under Subsection 2-207(1). The arbitration clause will then be viewed as a “proposal” under Subsection 2-207(2) which will be deemed to have been accepted by The Carpet Mart unless it materially altered the oral offers.
If the District Court finds that Collins & Aikman’s acknowledgment forms were not acceptances but rather were confirmations of prior oral agreements between the parties, an application of Section 2-207 similar to that above will be required.