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Three-Seventy Leasing Corp. v. Ampex Corp. - 528 F.2d 993 (5th Cir. 1976)

Rule:

Elemental principles demand that there be a meeting of the minds and a communication that each party has consented to the terms of the agreement in order for a contract to exist.

Facts:

Three-Seventy Leasing Corporation (“370”) brought an action against Ampex Corporation (“Ampex”) for breach of a contract to sell computer core memories. 370 challenged the district court's determination of damages and its award of costs to Ampex, who challenged the determination that an enforceable contract existed.

Issue:

Did an enforceable contract exist between 370 and Ampex?

Answer:

Yes

Conclusion:

The court affirmed the judgment in part because there was sufficient evidence to support the district court's finding of an enforceable contract and that the terms of that contract precluded recovery of the type of compensatory damages sought by 370 in the court below. The court concluded that a salesman had apparent authority to accept 370's offer on behalf of Ampex and that a letter from the salesman to 370 could reasonably be interpreted to be an acceptance. The court further concluded that the letter could reasonably have been interpreted as a promise to ship the core memories. The court found that the limitation on consequential damages found in the contract was valid and precluded the recovery of damages for lost profits by 370. The court held that the award of costs to Ampex was error and remanded for a reconsideration of that issue. The court directed the district court to enter an award of nominal damages in favor of 370, as a breach of contract action existed, but the harm caused by the breach was not sufficiently established so as to allow an award of compensatory damages.

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