73133221.

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Brown Machine, Inc. v. Hercules, Inc. Missouri court of appeals, 1989 770 S.W.2d 416 Page 153 Facts: Plaintiff: Brown machine (respondent) Defendant: Hercules (appellant) Timeline: Oct.1975 Hercules asks for price quote Nov.7,1975 brown sends quote (original proposal (offer NO)) --had terms and conditions (included liability waiver) Jan. 7, 1976 telephone: Hercules calls brown, purchase order in response to the original quote, rejects 20% deposit Jan 8, 1976 brown notes oral PO(purchase order) Jan 19, 1976 brown receives written PO from Hercules, dated Jan.6. had one exception. --stated it accepted only on Hercules terms stated in PO (offer yes) --this PO contained no indemnity provision(no security agains loss/damages) Brown did not return a signed copy of this PO --PO said acceptance can be: accepting, delivering material, or performing services asked for. Jan. 20, 1976. brown tells shop to start project. Jan. 21, invoice requesting 20% sent to Hercules. Feb 5, 1976 brown sends Hercules an order acknowledgement letter. (counteroffer?, no acceptance on browns part of the PO) Feb. 9, Hercules writes to tell of one problem, which brown fixed. April 14, 1976 brown sends invoice for whole payment of machine. Brown ships machine, Hercules pays the agreed to amount. 2 employees of Hercules sued brown machine for injuries suffered while operating this machine. Brown machine demanded that Hercules defend the lawsuit, Hercules refused. Brown settles with employees, then sues Hercules for indemnification of the settlement amount paid the employees. Brown claims its sales contract had a provision for indemnity damages, Hercules claims that its PO was the actual contract which had no indemnity provision. Procedural History: Trial court ruled for Brown Now here

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Issues: Which contract was controlling? Did the parties agree to an indemnification provision in their contract for the sale of the machine? o indemnity: protection against loss or damage, compensation for loss or damage sustained. Holding: the Hercules PO was the actual offer accepted by brown. Thus the parties did not agree to an indemnification provision. Reasoning: general rule is that a price quote is not an offer, rather an invitation to enter negotiations. o Price quote, if sufficiently detailed, can be an offer but it must reasonably appear form the quote that assent to quote is all that is needed to form contract. Hercules could not have thought it was an offer. Language of quote is suggesting negotiation. Further, price quote expired before accepted. Thus, Hercules PO (jan6,1976) is the offer. o The question is whether browns acknowledgment letter constitutes an acceptance or a counter offer. Here is the battle of forms o Browns response to Hercules offer (PO) operates as a valid acceptance even if terms are different, UNLESS browns acceptance is made expressly conditional on the offerors assent to the additional or different terms. If expressly conditional then this is the mirror image rule and it becomes a counteroffer This conditional acceptance must be clearly expressed, that offeree is unwilling to continue unless his additional terms are assented to. o It was not clear that brown would not continue without some Hercules assenting to additional terms. Therefore this was an acceptance not a counteroffer. The acknowledgement letter was an acceptance! o The additional terms will enter contract unless the offer expressly limits acceptance to the terms of the offer which the PO did. 2-207(2)(a). o Since Hercules did not assent to the indemnity clause, it did not become part of the contract. Procedural Result: Reversed, indemnity clause is not part of the contract. Therefore, Hercules does not have to pay damages sustained by Miller employees.

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Significance: Price quote can amount to offer if it reasonably appears from quote that assent to quote is all that is needed to ripen offer into contract. Notes: