Brief Fact Summary. The Plaintiff, Corinthian Pharmaceutical Systems, Inc., (Plaintiff) and the Defendant, Lederle Laboratories (Defendant), had an ongoing business relationship, whereby Plaintiff would place orders of DTP vaccine from Defendant and would be invoiced for the vaccine after the fact. Upon learning of an impending price increase, Plaintiff placed a large order of DTP and confirmed this order in writing with the office of Defendant. Defendant partially filled Plaintiff’s order, and refused to fill the rest of the order, citing the price increase and lack of proper acceptance of Plaintiff’s offer as reasons for doing so.
Synopsis of Rule of Law. This case stands for the proposition that an offer is not accepted by shipment of non-conforming goods.
Issue. The issue here is whether a contract was formed when Plaintiff placed its order for 1000 vials of DTP vaccine at $64.32, which was partially filled by Defendant.
Held. Defendant’s Motion for Summary Judgment was granted.
In his analysis, Judge McKinney sites Section:2-206 of the Uniform Commercial Code (U.C.C), which stands for the proposition that an offer to buy goods for shipment shall be construed as open until accepted. Because Plaintiff made its order on Defendant’s electronic ordering system, the court found that an automated act cannot constitute an acceptance.
Further, Section:2-206 of the U.C.C. goes on to state that a shipment of non-conforming goods does not constitute an acceptance if the seller takes measures to notify the buyer that the goods are offered only as an accommodation. In this case, Defendant did not accept Plaintiff’s offer when it shipped 50 vials at the Plaintiff’s desired price. Instead, the court found that Defendant offered 50 vials as an accommodation and reasonably notified the Plaintiff that its offer was not accepted.
Discussion. This case stands for two propositions. First, acceptance cannot be made by a computer, in lieu of actual communication. Second, an accommodation by a buyer, in response to a seller’s offer to buy is not to be construed as an acceptance of that offer when the goods are nonconforming and the buyer clearly communicates to the seller that he does not intend to accept their offer.