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Nordyne, Inc. v. Int'l Controls & Measurements Corp. - 262 F.3d 843 (8th Cir. 2001)

Rule:

Under Missouri case law, an offer is made when the offer leads the offeree to reasonably believe that an offer has been made. An offer is defined as the manifestation of willingness to enter into a bargain, so made as to justify another person in understanding that his assent to that bargain is invited and will conclude it. The general rule is that a price quotation, such as one appearing in a catalogue or on a flyer, is not an offer, but is rather a suggestion to induce offers by others. However, a price quotation, if detailed enough, can amount to an offer creating the power of acceptance; to do so it must reasonably appear from the price quote that assent to the quote is all that is needed to ripen the offer into a contract. Factors relevant in determining whether a price quotation is an offer include the extent of prior inquiry, the completeness of the terms of the suggested bargain, and the number of persons to whom the price quotation is communicated. 

Facts:

Plaintiff Nordyne, Inc., a Delaware corporation with its principal place of business in Missouri, manufactured heating, ventilation, and air conditioning equipment. Defendant International Controls & Measurements Corporation ("ICM"), a New York corporation, manufactured electronic defrost control boards for use in such equipment. The parties had been doing business for approximately 10 years when ICM began marketing a new version of the control panel Nordyne had been purchasing. Nordyne purchased the new panels, but soon began experiencing difficulties with them. As a result, Nordyne filed a breach-of-warranty action in Missouri federal district court. ICM filed moved to dismiss the complaint for improper venue, invoking the forum-selection clause on the reverse side of its invoices, which set New York as the jurisdiction for any disputes arising from the parties' dealings. The district court granted the motion, holding that a forum-selection clause was enforceable. Nordyne appealed.

Issue:

Was there a valid contract between Nordyne and ICM?

Answer:

Yes.

Conclusion:

The appellate court affirmed the district court's decision. The court noted that under Missouri case law, an offer was made when the offer led the offeree to reasonably believe that an offer had been made. A price quotation, the court explained, if detailed enough, could amount to an offer creating the power of acceptance; to do so it must reasonably appear from the price quote that assent to the quote was all that was needed to ripen the offer into a contract. In the instant case, the quotation included sufficient terms to constitute an offer under Missouri law because: (1) the parties had been communicating for several months regarding the contract at issue before the quotation was sent; (2) the quotation was sent only to Nordyne, and; (3) the quotation included quantity, price, and time in which to accept, as well as packaging, shipping, and payment terms. The forum-selection provision had been part of the parties' course of dealing and incorporated by reference into the present contract.

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