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Keywords

contractmotionsummary judgmentmotion for summary judgment

contractbreach of contractmotionsummary judgmentcorporationmotion for summary judgment

Related Cases

Quaker State Mushroom Co., Inc. v. Dominick’s Finer Foods, Inc., of Illinois, 635 F.Supp. 1281, 1 UCC Rep.Serv.2d 365

Facts

Quaker State Mushroom Co. and Dominick's Finer Foods, Inc. had a prior agreement regarding the sale of mushrooms, which expired in March 1983. After the expiration, Dominick's placed four orders for mushrooms in late 1983, but Quaker State sent a notice of price increase shortly after the first order. Dominick's paid based on the old prices, arguing that the price increase was not effective for orders placed before the notice. The dispute arose over whether a contract existed for these orders and what the applicable price should be.

Quaker State Mushroom Co. (“Quaker State”), a Pennsylvania corporation, has filed this diversity breach of contract complaint charging that Dominick's Finer Foods, Inc. (“Dominick's”), a Delaware corporation doing business in Illinois, failed to pay the agreed price for four orders of canned mushrooms.

Issue

Did a contract exist for the orders placed by Dominick's before and after the price increase notice, and what was the appropriate price for the goods delivered?

Rule

Under UCC § 2-305(4), if the parties intend not to be bound unless the price is fixed or agreed and it is not fixed or agreed, there is no contract, and the buyer must pay the reasonable value of the goods.

Where, however, the parties intend not to be bound unless the price be fixed or agreed and it is not fixed or agreed there is no contract.

Analysis

The court analyzed the communications and conduct of both parties, concluding that no contract was formed for the orders placed before the price increase notice due to the lack of agreement on price. For the orders placed after the notice, the court found that Dominick's acceptance of the goods did not constitute acceptance of the higher price, as the price increase notice was not an offer but an invitation to place an order at the new price. Thus, the court determined that Dominick's was liable for the reasonable value of the goods.

It is clear that the parties intended to have a contract, acted as if they had a contract, but had not agreed upon a price for the goods.

Conclusion

The court denied Quaker State's motion for summary judgment, concluding that there was no contract for the orders placed before the price increase and that a factual issue existed regarding the reasonable value of the goods.

For the above reasons, Quaker State's motion for summary judgment is denied.

Who won?

Dominick's Finer Foods, Inc. prevailed as the court denied Quaker State's motion for summary judgment, indicating that no contract was formed for the disputed orders.

Dominick's has acknowledged that it received this notice shortly after November 10.

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