Law School Case Brief
J.D. Fields & Co. v. United States Steel Int'l, Inc. - 690 F. Supp. 2d 487 (S.D. Tex. 2010)
Generally a price quotation is considered an invitation for an offer, rather than an offer to form a binding contract, and a purchase order usually is the first document having the legal attributes of an offer. Because there are exceptions to these general rules, however, the decisive question on whether a price quotation creates a binding offer is whether it reasonably appears from the price quotation that assent to the quotation is all that is needed to ripen the quotation into a contract.
Plaintiff buyer J.D. Fields & Company, Inc. brought an action against defendant seller United States Steel International, Inc. regarding a dispute over three transactions for the sale of steel pipe. The buyer alleged breach of contract and promissory estoppel regarding two transactions for steel pipe in which the buyer claimed that its purchase orders created binding contracts that the seller failed to fill. The United States District Court granted in part and denied in part the seller's motion for summary judgment and denied the buyer's motion for partial summary judgment. In its subsequent motion for reconsideration, the buyer alleged that the Court committed four errors in the opinion.
Does a price quotation constitute a binding contract between the buyer and the seller?
To begin, the Court explained that the Federal Rules of Civil Procedure do not specifically provide for motions for reconsideration. The Court's 2009 memorandum opinion and order created an interlocutory order. The Court decided that the buyer's motion should be considered under the standards applied to Fed. R. Civ. P. 59(e) motions; Rule 59(e) gives the federal courts power to revise an interlocutory order before the entry of judgment adjudicating all the parties' claims, rights, and liabilities.
In its first of four claims of error, plaintiff buyer J.D. Fields' argued that the Court erred in concluding as matters of law that no contracts had been formed as to purchase orders. The Court disagreed. Based on a number of factors, it could not reasonably have appeared that the buyer’s employees that assented to defendant seller USSI's price quotations was all that was needed to ripen the offers into contracts. Because the buyers's argument was merely a rehashing of arguments already considered at the summary judgment stage, the Court concluded that it was not entitled to relief on this claim.
In its second claim of error, the buyer that the Court erred in granting summary judgment to the seller on the breach of contract claims because contract formation is a question of fact and, therefore, is inappropriate to dispose of in summary judgment. The Court held that courts may determine issues of contract formation as a matter of law, and may do so according to the reasonable appearance of a price quote, if there is no genuine dispute about any material fact.
Concluding that the buyer had not raised any "manifest errors of law or fact" for which a federal court should apply the extraordinary remedy of relief under Rule 59(e), the Court denied the buyer's motion for reconsideration.
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