Contracts I, Pages 309–313

Nordyne v. International Controls & Measurements Corp.

United State court of Appeals, Eighth Circuit, 2001

Facts:

Plaintiff, a Delaware corporation with its principal place of business in St. Louis, Missouri, manufactured HVAC equipment and used New York-based defendant's control boards in the equipment. The invoices said that it was accepted on the condition of the terms of agreement on the reverse side side of the invoice. One of the Terms and Conditions of Sale was a forum-selection provision requiring suits to be brought in Onondaga, New York. Another term provided a warranty for one year from the date of shipment.

Defendant marketed a new board to plaintiff who said one of its features was not necessary. Defendant then removed this feature and gave plaintiff a quote for the new board. The bottom of the quote said the condition on the reverse side were part of the quote. One of the conditions said that it was subject to defendant's standard terms and conditions. Plaintiff requested and received some samples and then signed the production approval. Two days later plaintiff issued a purchase order for 20,000 units at the quoted price. The back of the purchase order said that the buyer would not be bound until he received the acknowledgment copy of the order executed by Seller and acceptance of the order of the order constituted an acceptance of all of the conditions. None related to choice of forum. Defendant then shipped the first shipment on September 30, and included the customer service invoice, as it had done. Defendant finished shipping the order and plaintiff paid in full. Afterwards, plaintiff experienced difficulties with the control panels and filed a breach-of-warranty in the district court.

Procedural History:

District court held that defendant's quote constituted an offer which plaintiff accepted, including the forum selection clause. District court then granted defendant's motion to dismiss for improper venue.

Issue:

Did the quote constitute an offer?

Rules:

  • LexisNexis IconWestLaw LogoGoogle Scholar LogoPage 312, Paragraph 3

    An "offer is made when the offer leads the offeree to reasonably believe that an offer has been made."

  • A price quotation is not an offer unless "detailed enough . . . so it reasonably appear[s] from the price quote that assent to the quote is all that is needed to ripen the offer into a contract."

  • LexisNexis IconWestLaw LogoGoogle Scholar LogoPage 312, Paragraph 3, Bottom

    Factors relevant in determining whether a price quotation is an offer include the extent of prior inquiry, the completeness of the terms of the suggested bargain, and the number of persons to whom the price quotation is communicated.

Reasoning:

All factors weigh in defendant's favor. They had been communicating for months, it was only to plaintiff, and the quote included quantity, price, time to accept, and packaging, shipping, and payment terms. THe product was even specifically designed for plaintiff. The minimum was quantity was implicitly bound to be approximately the 40,000 quoted for. The forum-selection clause had also been a traditional part of their business.

Holding:

Yes, the quote constituted an offer. Affirmed.

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