Law School Case Brief
Interstate Indus., Inc. v. Barclay Indus., Inc. - 540 F.2d 868 (7th Cir. 1976)
A general offer must be distinguished from a general invitation to make an offer. A mere quotation of price must be distinguished from an offer. From the nature of the subject, the question whether certain acts or conduct constitute a definite proposal upon which a binding contract may be predicated without any further action on the part of the person from whom it proceeds or a mere preliminary step which is not susceptible, without further action by such party, of being converted into a binding contract depends upon the nature of the particular acts or conduct in question and the circumstances attending the transaction. It is impossible to formulate a general principle or criterion for its determination. Accordingly, whether a communication naming a price is a quotation or an offer depends upon the intention of the owner as it is manifested by the facts and circumstances of each particular case.
Defendant Barclay Industries, Inc. ("Barclay") sent a letter from its offices in Lodi, New Jersey, advising plaintiff Interstate Industries, Inc., an Indiana corporation ("Interstate"), that it would be able to manufacture fiberglass panels in accordance with certain specified standards. The letter included the prices Barclay would charge for manufacturing the panels. Interstate mailed two purchase orders to Barclay's New Jersey office with "F.O.B. Delvd." notations in the upper right hand corners. Barclay later sent a letter from its New Jersey office informing Interstate that it would be unable to provide the panels requested in the purchase orders. Interstate filed a complaint against Barclay in federal district court seeking damages for breach of contract. Barclay filed a motion to dismiss the complaint or in the alternative to quash the return of service on the ground that the court lacked personal jurisdiction over Barclay because Barclay was a Delaware corporation. The district court denied the motion. Barclay appealed.
Did the district court have jurisdiction over Barclay?
The court appellate court held that the correspondence between the companies did not constitute an enforceable contract to deliver goods in Indiana. The court determined that Barclay's letter: (1) advised Interstate of availability; (2) specifically referred to its contents as a price quotation; (3) contained no language which indicated that an offer was being made; and (4) failed to mention the quantity, the time of delivery, or payment terms. Under these circumstances, the court held that the letter did not constitute an offer. Consequently, the court held that the contract to supply goods to be furnished in Indiana that was alleged in the complaint did not exist and that there was no basis for personal jurisdiction over Barclay. The court also was not persuaded by Interstate's assertion that the court had personal jurisdiction over Barclay because it was "doing business" in Indiana. The court vacated the judgment of the district court and remanded the matter for further proceedings.
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