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

Exercise 10

Offer. In 1998, Johnson Controls, Inc. (JCI), began buying auto parts from Q. C. Onics Ventures, LP. For each part, JCI would inform Onics of its need and ask the price. Onics would analyze the specifications, contact its suppliers, and respond with a formal quotation. A quote listed a part's number and description, the price per unit, and an estimate of units available for a given year. A quote did not state payment terms, an acceptance date, the time of performance, warranties, or quantities. JCI would select a supplier and issue a purchase order for a part. The purchase order required the seller to supply all of JCI's requirements for the part but gave the buyer the right to end the deal at any time. Using this procedure, JCI issued hundreds of purchase orders. In July 2001, JCI terminated its relationship with Onics and began buying parts through another supplier. Onics filed a suit in a federal district court against JCI, alleging breach of contract. Which documents-the price quotations or the purchase orders-constituted offers? Which were acceptances? What effect would the answers to these questions have on the result in this case? Explain. [ Q. C. Onics Ventures , LP v. Johnson Controls , Inc.,_F.Supp.2d_(N.D.Ind. 2006)]