McCarty v. Verson Allsteel Press Co.
89 Ill. App. 3d 498, 411 N.E.2d 936 (1980)
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Rule of Law:
Under UCC § 2-207, a price quotation that requires acceptance at the seller's home office is not an offer but an invitation for an offer. The buyer's subsequent purchase order constitutes the offer, and the seller's unconditional signature on the buyer's acknowledgment form acts as an acceptance of the buyer's terms.
Facts:
- In early 1971, Verson Allsteel Press Company (seller) and Nash Bros. Co. (buyer) engaged in oral negotiations for the sale of a punch press, focusing on technical specifications without discussing indemnification.
- On May 19, 1971, Verson sent Nash a price quotation proposal which stated all orders were subject to 'acceptance of home office.'
- Enclosed with the proposal were Verson's 'Conditions of Sale,' which contained a clause requiring Nash to indemnify Verson against all claims arising from the press's design or manufacture.
- On June 16, 1971, Nash sent Verson its own 'Purchase Order' form, which stated it was an offer, that its terms constituted the complete agreement, and that no different or additional terms from the seller would be binding.
- On June 25, 1971, a Vice-President at Verson signed and returned the acknowledgment copy of Nash's purchase order form without any modifications or conditions.
- In 1974, a Nash employee was injured while operating the press, allegedly due to safety defects.
Procedural Posture:
- An employee of Nash Bros. Co. sued Verson Allsteel Press Company in a products liability action.
- Verson settled the employee's lawsuit for $300,000.
- Verson, as a third-party plaintiff, filed a suit for indemnification against Nash, the third-party defendant, in the state trial court.
- Following a bench trial, the trial court entered judgment in favor of Verson for $322,745.44.
- Nash, as appellant, appealed the trial court's judgment to the Appellate Court of Illinois.
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Issue:
Does an indemnity clause contained in a seller's price quotation, which is subject to home office acceptance, become part of a sales contract when the buyer's subsequent purchase order contains conflicting terms and the seller signs the buyer's acknowledgment form without expressly conditioning its acceptance on assent to its own terms?
Opinions:
Majority - Mr. Justice Romiti
No. The indemnity clause did not become part of the contract because the seller's price quotation was not an offer, and the seller accepted the buyer's counter-offer which did not include the clause. A communication is not an offer if the party making it retains the right to give a final expression of assent, as Verson did with its 'home office acceptance' clause. Therefore, Verson's quotation was merely an invitation to deal. Nash's purchase order, which explicitly stated it was an offer with its own controlling terms, was the operative offer. Verson's unconditional signature on Nash's acknowledgment form constituted acceptance of Nash's offer, forming a contract on Nash's terms, which excluded the indemnity provision. Even if Verson's acknowledgment were treated as an acceptance with additional terms under UCC § 2-207(2), the indemnity clause would materially alter the contract and thus not be incorporated.
Analysis:
This case clarifies the 'battle of the forms' under UCC § 2-207 by establishing that a price quotation conditioned on 'home office acceptance' is not a legally binding offer. This shifts the power in the formation of the contract to the buyer, whose purchase order becomes the offer. The decision serves as a critical precedent, warning sellers that unconditionally signing a buyer's acknowledgment form will be construed as acceptance of the buyer's terms, thereby excluding any conflicting terms from the seller's initial proposal. It reinforces that material, un-bargained-for terms like broad indemnification clauses will not be implicitly incorporated into a contract through a boilerplate exchange.
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