Interstate Industries, Inc. v. Barclay Industries, Inc.

Brief Fact Summary.

Barclay (defendant) manufactured and sold fiberglass panels to Interstate (plaintiff). Barclay sent a letter to Interstate indicating new type of fiberglass panel stating the “price quotation is based on orders of 75,000 sq. ft. or more freight prepaid, F.O.B. Lodi, New Jersey.” Later, Interstate mailed two PO which were refused by Barclay after 2 months. Interstate sued Barclay and Barclay filed a motion to dismiss the complaint. The district court denied Barclay’s motion, but allowed to file an interlocutory appeal.

Synopsis of Rule of Law.

Distinguishing between a price quotation and an offer relies on the aim of the parties and the language utilized by the communicator, particularly whether quantity, value, delivery terms, and payment methods are incorporated in the communication.

Facts.

Barclay Industries, Inc. (Barclay) (defendant) made fiberglass panels and sold them to Interstate Industries, Inc. (Interstate) (plaintiff) for many years. At a certain point during the parties' business relationship, Barclay sent a letter to Interstate showing that it could produce another kind of fiberglass panel. The letter incorporated the costs that would be charged and explicitly expressed that the "value citation depends on requests of 75,000 sq. ft., or more (truckload quantities) freight paid ahead of time, F.O.B. Lodi, New Jersey." Shortly from that point, Interstate sent two purchase orders for the fiberglass panels to Barclay's office. After two months, Barclay educated Interstate that it couldn't give the panels as requested. Interstate recorded suit in federal court against Barclay for breach of the agreement. Barclay recorded a motion to dismiss the complaint or in the other option to quash the return of service because the court lacked personal jurisdiction over Barclay. The district court denied Barclay's motion, yet enabled the organization to document an interlocutory appeal to the U.S. Court of Appeals.

Issue.

Does distinguish between a price quotation and an offer rely on the aim of the parties and the language utilized by the communicator, particularly whether quantity, value, delivery terms, and payment methods are incorporated in the communication?

Held.

Yes. Distinguishing between a price quotation and an offer relies on the aim of the parties and the language utilized by the communicator, particularly whether quantity, value, delivery terms, and payment methods are incorporated in the communication.

Dissent.

N/A

Concurrence.

N/A

Discussion.

Section 2-204 of the Uniform Commercial Code (UCC) states, in part, that “[A] contract for the sale of goods may be made in any manner sufficient to show agreement, including conduct by both parties which recognizes the existence of such a contract.” Thus, to shape a substantial contract it is important that the parties have an indication of mutual assent or "meeting of the minds." See Restatement of Contracts § 20 (1932). The initial phase in the formation of an agreement is the making of an offer. However, an offer is frequently mistaken with the price quotation. Whether a correspondence naming a price is a quotation or an offer relies on the aim of, and the language utilized by, the communicator as it is showed by the facts and circumstances of every specific case. R.E. Crummer and Co. v. Nuveen, 147 F.2d 3 (seventh Cir.1945). Here, it is undisputed that the letter from Barclay to Interstate (1) particularly alluded to its contents as a price quotation; (2) contained no language which showed that an offer was being made; (3) and neglected to explicitly state the quantity of fiberglass panels required for purchase, time of conveyance, or payment terms. Under those conditions, Barclay's letter was not an offer and accordingly no agreement was framed. The judgment of the district court is vacated and the matter is remanded for further proceedings consistent with the opinion.