Cengage Advantage Books: Business Law Today, The Essentials 10th Edition by Roger LeRoy Miller

تمرين 18

WPS, Inc. v. Expro Americas, LLC
FACTS In April 2006, WPS, Inc., submitted a formal proposal to manufacture equipment for Expro Americas, LLC, and Surface Production Systems, Inc. (SPS). Expro and SPS then submitted two purchase orders. WPS accepted the first purchase order in part and the second order conditionally. Among other things, WPS required that, by April 28, 2006, Expro and SPS give their "full release to proceed" and agree "to pay all valid costs associated with any order cancellation." The parties' negotiations continued, and Expro and SPS eventually submitted a third purchase order on May 9, 2006. The third purchase order did not comply with all of WPS's requirements, but it did give WPS full permission to proceed and agreed that Expro and SPS would pay all cancellation costs. With Expro and SPS's knowledge, WPS then began work under the third purchase order. Expro and SPS soon canceled the order, however, so WPS sent them an invoice for the cancellation costs. At trial, the jury and court concluded that there was a contract and found in WPS's favor. Expro and SPS appealed.
ISSUE Did the parties have a contract even though Expro and SPS did not comply with all the requirements of WPS's conditional acceptance?
DECISION Yes. The Texas appellate court affirmed the judgment for WPS.
REASON The court found that the parties had a contract based on WPS's conditional acceptance and Expro and SPS's third purchase order. It did not matter that Expro and SPS submitted the third purchase order after WPS's deadline of April 28, 2006. Regardless of what WPS originally required, the parties continued their negotiations and "operated as if they had additional time to resolve the outstanding differences." Moreover, Expro and SPS agreed to nearly everything that WPS requested. Most important, they gave WPS "full release to proceed" and agreed "to pay all valid costs associated with any order cancellation." Those terms had been holding up the contract, and SPS's vice president conceded that the release to proceed "basically means that one party is in agreement." A jury could have reasonably concluded that, since the parties were in agreement, WPS was contractually obligated to move forward with its work.
CRITICAL THINKING-Legal Consideration By allowing a party to condition its acceptance on additional terms, does contract law make negotiations more or less efficient ? Explain.