Cengage Advantage Books: Fundamentals of Business Law 9th Edition by Roger LeRoy Miller

Exercise 18

Acceptance. JMAM, LLC, is a wholesaler of costume jewelry doing business as "Joan Rivers Worldwide Enterprises." B.S. International, Ltd. (BSI), makes costume jewelry JMAM and BSI did business under an agreement written by JMAM that set forth certain terms. One of the terms specified that JMAM would receive credit from BSI for any items rejected by JMAM's customers. JMAM had presented the terms to BSI with a cover letter stating, "By signing below, you the vendor agree to [these] terms." Steven Baracsi, BSI's owner, had signed the letter and returned it. For the next six years, BSI made jewelry for JMAM, which sold the jewelry to QVC, Inc. Items rejected by QVC were sent back to JMAM, which applied the cost as a credit against BSI invoices. The items, however, were never returned to BSI. When a dispute arose over the orders, BSI filed a suit in a Rhode Island state court against JMAM, claiming that it was owed $41,294.21 for items delivered but not returned. BSI showed the court a copy of JMAM's terms. Across the bottom had been typed a "PS. [Post Script]" requiring the return of rejected merchandise. Baracsi testified that he had mailed this page to JMAM. James Halliday, JMAM's chief financial officer, testified that he had never seen it. When do additional terms become part of a contract between merchants? Was BSI's "PS." part of this contract? Discuss. [ B. S. International , Ltd. v. JMAM , LLC , 13 A.3d 1057 (R.I. 2011)]