Beard Implement Co. v. Krusa
567 N.E.2d 345 (1991)
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Rule of Law:
When a purchase order unambiguously specifies the manner of acceptance, a contract is not formed until the offeree accepts in that specified manner. The offeror is the master of the offer and may prescribe the conditions and terms for the method of acceptance.
Facts:
- Between December 20 and 23, 1985, Carl Krusa, a farmer, had several conversations with representatives of Beard Implement Company, Inc. about purchasing a new combine.
- On December 23, 1985, at Beard's office, a Beard representative filled out a purchase order for a new combine.
- The purchase order form, drafted by Beard, included the language 'This order subject to acceptance by dealer' and a signature line designated for the 'DEALER'.
- Krusa signed the purchase order and also signed an undated counter check for $5,200 as a down payment.
- No representative from Beard Implement Company ever signed the purchase order in the designated space.
- After having misgivings over the Christmas weekend, Krusa telephoned Beard's manager on December 26, 1985, and stated that he did not wish to proceed with the transaction.
- On December 27, 1985, Krusa mailed a letter to Beard confirming his revocation of the offer and also signed a contract to purchase a combine from a different dealer, Cox Implement Company.
Procedural Posture:
- Beard Implement Company, Inc. (plaintiff) sued Carl Krusa (defendant) for breach of contract in an Illinois trial court.
- Following a bench trial, the trial court found that a contract existed and entered a judgment in favor of Beard Implement Company, Inc.
- Carl Krusa (appellant) appealed the trial court's judgment to the Appellate Court of Illinois, Fourth District.
- Beard Implement Company, Inc. is the appellee in the appeal.
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Issue:
Does a legally binding contract for the sale of goods exist when a buyer signs a seller-provided purchase order that states it is 'subject to acceptance by dealer' and includes a specific signature line for the dealer, but the dealer never signs the order before the buyer revokes the offer?
Opinions:
Majority - Justice Steigmann
No, a legally binding contract does not exist under these circumstances. When an offer unambiguously requires a specific form of acceptance, no contract is formed until that acceptance occurs. In this case, the purchase order signed by Krusa was an offer to purchase the combine. The form, which was drafted by Beard Implement, unambiguously indicated that acceptance could only be made by the signature of the dealer in the designated space. Because no dealer for Beard Implement ever signed the form, the offer was never accepted. Therefore, Krusa's subsequent communication that he no longer wished to proceed with the transaction was a valid revocation of his offer before acceptance, and no contract was ever formed.
Analysis:
This case serves as a strong affirmation of the traditional contract law principle that the offeror is the 'master of the offer' within the framework of the Uniform Commercial Code (UCC). It clarifies that UCC § 2-206, which allows for acceptance in any reasonable manner, does not override an offer's explicit and unambiguous terms for acceptance. The decision emphasizes that businesses that draft their own standard forms are bound by the terms they set for contract formation, particularly when those terms require their own signature for acceptance. This prevents a party from selectively enforcing an agreement, holding the other party bound while remaining free to walk away until it formally signs.
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