Clifford-Jacobs Forging Co. v. Capital Engineering & Mfg. Co.

437 N.E.2d 22, 107 Ill. App. 3d 29, 62 Ill. Dec. 785, 34 U.C.C. Rep. Serv. (West) 24, 1982 Ill. App. LEXIS 1950
CourtAppellate Court of Illinois
DecidedJune 15, 1982
Docket17569
StatusPublished
Cited by33 cases

This text of 437 N.E.2d 22 (Clifford-Jacobs Forging Co. v. Capital Engineering & Mfg. Co.) is published on Counsel Stack Legal Research, covering Appellate Court of Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Clifford-Jacobs Forging Co. v. Capital Engineering & Mfg. Co., 437 N.E.2d 22, 107 Ill. App. 3d 29, 62 Ill. Dec. 785, 34 U.C.C. Rep. Serv. (West) 24, 1982 Ill. App. LEXIS 1950 (Ill. Ct. App. 1982).

Opinion

JUSTICE TRAPP

delivered the opinion of the court:

Defendant appeals from an order of the circuit court of Champaign County which granted plaintiff summary judgment on its complaint seeking the recovery of amounts allegedly owing under a contract for the sale of specially manufactured goods. We affirm the trial court’s order.

The complaint alleged that on March 5,1979, plaintiff received from defendant a “purchase order” form offering to buy substantial quantities of forged parts from plaintiff for use in a defense contract which defendant had been awarded by the Federal Government. The purchase offer listed estimates of prices and quantity and requested delivery within 12 to 46 weeks. Contained in the offer was a provision relative to the pricing of the goods which stated:

“If Seller’s prices are higher than herein specified, Buyer must be so advised before shipment. If no prices are specified, goods will be billed at not more than the prices last quoted to or paid by Buyer, or at the prevailing market prices, whichever is lower.”

On March 22,1979, Clifford-Jacobs responded to the offer by means of a standard “acceptance” form which listed the goods requested, their price, and estimated completion and delivery dates. The form stated that it was accepted for production in accordance with the terms on the reverse side of the form, and that those terms were to be a part of the contract between the parties. On the reverse side of plaintiff’s acceptance form, paragraph 2, which is the subject of the instant dispute, provided:

“Prices stated herein are based on current labor, material, and overhead costs and, if any changes occur in such costs at any time prior to shipment, prices may be adjusted by the seller to reflect such cost changes. If such adjustments are not mutually satisfactory, either party may cancel on terms set forth in paragraph 10. Prices are only for the quantities indicated, for production and shipment in one lot or as near thereto as the seller’s production makes possible. Unless otherwise stated, all forging prices are based upon one set up and mill steel prices.”

Several shipments were made by plaintiff in the year 1979, but in September of that year defendant was notified that shipments on or after October 15, 1979, would be subject to a general 7.2 percentage price increase. The complaint alleged the delivery of $135,805.49 of forgings following the price increase and prayed for damages and interest on the amounts owing under the contract. Defendant subsequently tendered payment of $121,423.88, following which plaintiff moved for summary judgment to recover the remainder of amounts alleged to be due under the contract. On August 10,1981, the trial court granted plaintiff summary judgment. The court reasoned that plaintiff’s paragraph 2 became a part of the parties’ agreement since the acceptance was conditional on assent to the different terms, and the defendant had assented to the terms. The court also concluded that defendant’s contract was not in conflict with plaintiff’s provision on price increases.

The narrow question presented is whether plaintiff’s paragraph 2 became a part of the parties’ contractual agreement. Both parties agree the resolution of this question is controlled by section 2 — 207 of the Uniform Commercial Code (Ill. Rev. Stat. 1979, ch. 26, par. 2 — 207). Section 2 — 207 provides:

“Additional Terms in Acceptance or Confirmation. (1) A definite and seasonable expression of acceptance or a written confirmation which is sent within a reasonable time operates as an acceptance even though it states terms- additional to or different from those offered or agreed upon, unless acceptance is expressly made conditional on assent to the additional or different terms.
(2) The additional terms are to be construed as proposals for addition to the contract. Between merchants such terms become part of the contract unless:
(a) the offer expressly limits acceptance to the terms of the offer;
(b) they materially alter it; or
(c) notification of objection to them has already been given or is given within a reasonable time after notice of them is received.
(3) Conduct by both parties which recognizes the existence of a contract is sufficient to establish a contract for sale although the writings of the parties do not otherwise establish a contract. In such case the terms of the particular contract consist of those terms on which the writings of the parties agree, together with any supplementary terms incorporated under any other provisions of this Act.”

The aim of section 2 — 207 seems clear. It rejected the “mirror acceptance rule” which theretofore required strict acceptance on the terms proposed by the offeror and made provision for additional and different terms if the offeree’s acceptance deviated from the terms of the offer. (See Ill. Ann. Stat., ch. 26, par. 2 — 207, Illinois Code Comment, at 149-50 (Smith-Hurd 1963).) Under section 2 — 207 an acceptance if “definite and seasonable” operates as an acceptance even though containing terms additional to or different from the original offer. (J. White & R. Summers, Uniform Commercial Code sec. 1 — 2, at 27 (2d ed. 1980).) The acceptance will be considered a counteroffer only if the acceptance is expressly made conditional on assent to the additional terms. This provision of the statute has been construed narrowly to apply only to an acceptance which clearly shows that the offeree is unwilling to proceed absent assent to the additional or different terms. See McCarty v. Verson Allsteel Press Co. (1980), 89 Ill. App. 3d 498, 411 N.E.2d 936; Dorton v. Collins & Aikman Corp. (6th Cir. 1972), 453 F.2d 1161.

At bar, the acceptance by plaintiff was not expressly conditional on assent to the additional terms. The acceptance of plaintiff operated to form a contract and the term on price, contained in plaintiff’s acknowledgment, is thus either in addition to the contract or a different term. If the provision is an addition, and not a material alteration, it will become a part of the contract (Ill. Rev. Stat. 1979, ch. 26, par. 2 — 207(2) (b)), but contrawise if it is a material alteration or actually a different provision. At bar, we believe plaintiff’s provision on prices to be an addition, and not a different term of the contract.

The parties’ forms both contained provisions relative to prices higher than, quoted, and from a comparison of the two it is apparent that they are not in conflict or different. Plaintiff’s price term contemplated a price increase as did defendant’s, and neither term prohibited the increase in the manner attempted by plaintiff.

Viewed as an addition to the contract, we arrive at the central inquiry: whether plaintiff’s price term was a material alteration of the parties’ agreement. Comments 3 through 5 of section 2 — 207 offer some guidance on this question. The comments to section 2 — 207 explain:

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437 N.E.2d 22, 107 Ill. App. 3d 29, 62 Ill. Dec. 785, 34 U.C.C. Rep. Serv. (West) 24, 1982 Ill. App. LEXIS 1950, Counsel Stack Legal Research, https://law.counselstack.com/opinion/clifford-jacobs-forging-co-v-capital-engineering-mfg-co-illappct-1982.