Computer Network Ltd. v. Purcell Tire & Rubber Co., 747 S.W.2d 669 (Mo. App. 1988) (full-text).
Factual Background Edit
Computer Network is in the business of selling and developing computer hardware and software. The comptroller for Purcell contacted Computer Network to discuss the purchase of personal computers. In 1983 the president of Computer Network, Curtis Lloyd Brown, helped develop a configuration of IBM personal computers for Purcell retail stores. The parties then discussed the exact price and number of computers for the purchase. After the discussions, Brown prepared a letter and the CEO and Comptroller of Purcell both signed it. The letter stated “this is written confirmation of our previous conversations regarding the purchase by Purcell Tire of twenty-one (21) IBM PC's over the next twelve (12) months.” The letter then listed the specific configurations and prices of all of the components. Over the next few months, nine computers were paid for and delivered to Purcell. The prices of these computers varied from the price in the letter because of market fluctuations.
After the expiration date of the “agreement,” Brown telephoned Purcell about delivery of the remaining twelve computers. Purcell responded that no such agreement existed. Computer Network brought this action for breach of contract and asked for damages. Purcell argues that no contract was ever made.
Trial Court Proceedings Edit
At trial Purcell argued that there were no definite terms and that the letter did not serve as a contract but instead as a way to verify a price if Purcell decided to purchase computers. Purcell also argued that a clause at the end of the letter which stated “If this is not in accordance with your understanding please let me know as soon as possible” shows that there was no definite contract.
Purcell listed a number of terms that were not included in the letter to show uncertainty; which party was required to deliver the computers, a provision related to price fluctuation, a reference to the authority of the parties signing, a reference to liquidated damages in case of breach, and a reference to legal counsel. The trial court held that the parties intended to have a contract and held in favor of Computer Network.
Appellate Court Proceedings Edit
On appeal the sole issues were (1) whether there was a contract for the sale of the computers and (2) whether the terms of the contract was sufficiently definite so as to be legally enforceable. Since this was a sale of goods the Uniform Commercial Code (UCC) applied. The court discussed the liberal approach the Code takes, stating that if parties intend to enter into a binding agreement, a contract will not fail despite having missing terms. However, the Code will not imply an agreement if the parties did not reach or intend one.
In this case, the court could not expect practical businessmen to articulate terms as a lawyer would, thus a basic agreement was sufficient to create a binding contract. The question of “intent” is left for the trier of fact and the trial court held that there was mutual assent by the objective manifestations of the parties.
Although Purcell may claim to have wanted to purchase fewer computers the trier of fact found the signed letter would lead the reasonably prudent man to believe Purcell wanted to purchase 21 computers. Although the prices fluctuated, Purcell quickly accepted the changes in price and paid for the computers without objection.
The court also held that under the UCC there is no requirement to detail all of an agreements terms provided there is a “reasonably certain basis for an appropriate remedy.” The letter contained all the material terms necessary for a remedy and therefore was not ambiguous such that it would prevent enforcing the contract. The judgment was affirmed.