Purchase Order Was An Offer, It Did Not Create a Contract
Description Appeals court affirmed dismissal of suit by buyer who submitted an order to buy a product based on an earlier discussion of the price of the product. The order to buy was an offer that was then rejected by the seller, so no contract was formed and there was no breach.
Topic Sales
Key Words Offer; Acceptance; Tortious Interference
C A S E   S U M M A R Y
Facts Audio Visual (AV) contacted Sharp with the intent to buy 1,400 calculators, which it intended to resell to CSR, a "socially and economically disadvantaged small business concern," which was going to then sell the calculators to the U.S. Navy. It quoted AV a price of $63 per calculator. AV then quoted CSR a price of $71 each. CSR would then charge the Navy some higher price. Sharp later told AV that it was going to dump the calculators and would sell them for $31 each. AV faxed an order for 1,400 at $31 that required a positive response from Sharp. Sharp called AV and asked if it was acting as a broker for an "underprivileged firm" and, if so, that Sharp would not sell to it. AV then obtained the calculators from a Sharp distributor for $31 each. It sold them to CSR which sold them to the Navy. AV then sued Sharp for breach of contract and tortious interference with its contract with CSR. Trial court dismissed the suit. AV appealed.
Decision Affirmed. Sharp rejected AV's purchase order. AV made an offer to buy based on a price it was quoted, which Sharp had to accept. There was no mutual assent under the UCC. The parties discussed the matter orally and in writing; that mix of communication forms is acceptable under the UCC; the written offer to buy did not prevent Sharp from orally refusing the order. There was no breach of contract because there was no contract. Further, Sharp's refusal to sell to AV was not a tortious interference with AV's dealings with CSR. Sharp said nothing to AV that it could rely upon legally in its dealings with CSR. Further, since AV obtained the calculators at the same price, $31, it suffered no loss.
Citation Audio Visual Associates, Inc. v. Sharp Electronics Corp., 210 F.3d 254 (4th Cir., 2000)

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