Law School Case Brief
Empire Mach. Co. v. Litton Bus. Tel. Sys. - 115 Ariz. 568, 566 P.2d 1044 (Ct. App. 1977)
In transactions where the offer to purchase is made on forms supplied by the seller, the buyer may adopt the manner of acceptance suggested by the seller. However, under such circumstances, the offeror who has the power to control the manner of acceptance may waive that requirement. The offeree can rely upon that manner of acceptance specified in the contract and the offeror's "waiver" of the manner of acceptance cannot create a contract without the assent of the offeree. This assent may be sufficiently expressed by the conduct of the soliciting offeree so as to bring into being a binding contract. The conduct on the part of the offeree which will constitute assent must be directed towards fulfilling the contractual obligation, that is, beginning performance, and that conduct must be conveyed by the offeree to the offeror. Moreover, the conduct must be by persons who have at least apparent authority to bind the offeree.
The machinery dealer sued the telephone business and its subsidiaries for breach of a contract to install a telephone system. The contract was signed by the account manager who was not given authority but the telephone business. When the trial court granted summary judgment to the telephone business, in essence finding, as a matter of law, that a binding contract was never consummated between the parties. The machinery dealer appealed.
Was summary judgment proper?
The court reversed summary judgment for the telephone business and subsidiaries and remanded because fact issues, as to whether the account manager's conduct was in furtherance of the telephone business' contractual obligations and whether he had authority to do so, precluded the grant of summary judgment. The court agreed that an account manager had no authority expressed or apparent to bind the telephone business. The machinery dealer was put on notice by a paragraph in the contract that said that the account manager had no authority to bind the telephone business by his actions. A letter was a request for an offer from the machinery dealer. An equipment sales agreement was issued in compliance with that request and was therefore an offer which required the telephone business' acceptance. The account manager had no apparent authority to bind the telephone business by his letter. Factual issues were presented, both as to whether the account manager's conduct was in furtherance of the telephone business' contractual obligations and whether he had authority, actual or apparent to do so. Such material, factual issues precluded the granting of summary judgment to either party.
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