Kuzmeskus v. Pickup Motor Co.
115 N.E.2d 461 (1953)
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Rule of Law:
A purchase order form that explicitly states it is not binding until authorized by an officer of the selling company constitutes an offer from the buyer, which can be revoked at any time before the seller communicates its acceptance.
Facts:
- On July 28, 1949, the plaintiff, Kuzmeskus, was awarded a contract to provide school transportation for the town of Montague.
- That same evening, agents from the defendant, Pickup Motor Company, Inc., met with Kuzmeskus to discuss the purchase of school buses.
- Kuzmeskus signed four separate printed order forms for new Dodge buses and gave the defendant's agents a check for $1,000 as a deposit.
- Each order form contained the clause: "This order is not binding unless authorized by an officer of the company, and purchaser’s credit has been OK’d by Finance Company."
- The forms provided a signature line for the "Purchaser," which Kuzmeskus signed, and a separate, blank line for "Authorized by."
- The next morning, at approximately 9:00 AM, Kuzmeskus telephoned the defendant's general manager to cancel the orders and requested the return of his deposit, confirming the cancellation by telegram within an hour.
Procedural Posture:
- Kuzmeskus (plaintiff) filed an action of contract in the Superior Court to recover his $1,000 deposit from Pickup Motor Company, Inc. (defendant).
- Pickup Motor Co. filed a counterclaim in "recoupment and set-off" for damages, alleging Kuzmeskus breached the purchase agreements.
- The case was referred to an auditor, whose findings of fact were to be final.
- The plaintiff moved for judgment based on the auditor's report.
- The Superior Court judge entered a finding for the plaintiff, Kuzmeskus, and also found for him as the defendant in the set-off claim.
- The defendant, Pickup Motor Co., appealed the judgment to the Supreme Judicial Court of Massachusetts.
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Issue:
Does a signed purchase order, which states that it is not binding until authorized by an officer of the seller company, create an enforceable contract upon the buyer's signature and delivery of a deposit, thereby preventing the buyer from revoking the order before the seller provides such authorization?
Opinions:
Majority - Williams, J.
No. A purchase order that explicitly conditions its binding effect on authorization by a company officer is merely an offer by the purchaser, not a completed contract. The court reasoned that the specific language on the order form, "This order is not binding unless authorized by an officer of the company," demonstrated that Pickup Motor Co. did not intend to be bound at the moment of signing. This language transformed what might have been an acceptance into a mere invitation for Kuzmeskus to make an offer. Therefore, Kuzmeskus's signed orders were proposals that did not ripen into contracts until accepted by Pickup Motor Co. Since Kuzmeskus revoked his offers by phone and telegram before Pickup Motor Co. communicated any acceptance or authorization, no binding agreements were ever formed. The court concluded that a promise made with the understood intention that it is not legally binding is not a contract, and Kuzmeskus was entitled to the return of his deposit.
Analysis:
This case provides a clear illustration of the 'offer and acceptance' framework in contract law, particularly concerning standard form agreements. The court's decision emphasizes that the specific language used by the parties, especially in a form drafted by one party, is paramount in determining their intent to be bound. It establishes that a seller who includes a clause requiring internal authorization before an order is 'binding' is, in legal effect, soliciting an offer from the buyer, not making one. This protects buyers by giving them a window to revoke their offer before the seller formally commits, reinforcing the principle that a contract requires a 'meeting of the minds' and communicated acceptance.
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