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Clifford-jacobs Forging v. Capital Eng'r

OPINION FILED JUNE 15, 1982.

CLIFFORD-JACOBS FORGING COMPANY, PLAINTIFF-APPELLEE,

v.

CAPITAL ENGINEERING & MFG. CO., DEFENDANT-APPELLANT.



APPEAL from the Circuit Court of Champaign County; the Hon. CREED D. TUCKER, Judge, presiding.

JUSTICE TRAPP DELIVERED THE OPINION OF THE COURT:

Rehearing denied July 20, 1982.

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 ...


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