Opinion ID: 349377
Heading Depth: 1
Heading Rank: 1

Heading: Scope of the Work

Text: 33 At trial Semco resisted the trial court's conclusion that a contract had been created as a matter of law; a large part of the defendant's case was devoted to its assertion that the elements necessary to the formation of a contract were never present. Specifically, Semco urges that it had not accepted the offer of FSM because the terms in the acknowledgment regarding the description of the work differed so significantly from the term covering the work proposed in the purchase order that no mutual assent on the essential terms existed. 34 According to Semco's interpretation, the difference between the materials included in FSM's purchase order and the materials excluded in the Semco acknowledgment amounted to over $150,000 worth of goods. To support its interpretation at trial, Semco's expert witness showed on differently colored schematics of the contract drawings those portions of the ductwork which, in his opinion, would be included within the terms of the purchase order and which, in his opinion, would be included within the terms of the acknowledgment. 35 It was FSM's contention at trial, through Koenig's testimony, that the purchase order language did not vary from the scope of the work as set out in the acknowledgment; he testified that he never intended to order those items which Semco listed as exclusions, with the possible exception of the exclusion of offsets which Koenig admitted did get by me. 36 On appeal Semco still urges that no contract exists as a matter of law, and FSM has referred the court to U.C.C. § 2-207, which provides that (a) definite and seasonable expression of acceptance    operates as an acceptance even though it states terms additional to or different from those offered or agreed upon   . (Emphasis added.) According to Semco, FSM's reliance on that section is misplaced; it still requires a definite    expression of acceptance and that would preclude a return document that diverges significantly as to a dickered term as operating as a § 2-207(1) acceptance. J. White & R. Summers, Uniform Commercial Code Sec. 1-2, at 32 (1972). 37 We agree with Semco that an acceptance is a prerequisite to the application of § 2-207 and that (o)nly where all the traditional criteria of intent are met showing that a contract has been made should Section 2-207 be applied; only then should the prescriptions of Section 2-207 as to additional terms become relevant. R. Duesenberg & L. King, Bender's Uniform Commercial Code Service § 3.05, at 3-51 (1977). 8 See Duval & Co. v. Malcom, 233 Ga. 784, 214 S.E.2d 356 (Ga.1975). The court here must interpret the terms of the offer and the acceptance, which are stated differently, to determine if the return document diverges significantly as to a dickered term; in our interpretation it does not, and a definite and seasonable expression of acceptance was given. 38 The antecedent negotiations and circumstances prior to the submission of the purchase order convince us that the buyer clearly intended to limit the scope of his purchase order in accordance with the exclusions set out in the acknowledgment. The quotations clearly served as the basis for the purchase order in this case; with the exception of offsets being placed under ALTERNATES instead of EXCLUSIONS, the exclusions in the acknowledgment are identical to the exclusions in the second quotation. The parties bargained with reference to the second quotation and thereafter arrived at a price of $207,500, the same price used on the purchase order and repeated in the acknowledgment. It is even apparent that a number of the exclusions are part of Semco's printed form and would appear to be routinely excluded without reference to the negotiations. 39 These documents in no way indicate that FSM in its purchase order intended to include those items which had been excluded throughout the course of the negotiations. In fact, FSM promptly acknowledged receipt of Semco's acknowledgment without objections and with the obvious understanding that the parties had a contract. The quotations are clearly relevant in discerning the parties' intent: (A party) may prove the antecedent negotiations and communications between the parties for the purpose of determining the meaning justly to be adopted and made effective by the court. A. Corbin, Corbin on Contracts § 543, at 519 (1 Vol.Ed.1952). Furthermore, it is clear that (t)he concept of construing a commercial transaction in accordance with the parties' intent pervades the Code, Stewart-Decatur Security Systems v. Von Weise Gear Co., 517 F.2d 1136, 1140 n.11 (8th Cir. 1975) (emphasis added), and we decline to interpret that intent in this case in accordance with Semco's expert witness' understanding of the language. The interpretation the buyer now urges is consistent with these documents and certainly one about which the seller had reason to know. FSM has conceded that the exclusion of offsets became part of its contract with Semco and is willing to exclude damages to the extent of their value. 40 We conclude that a contract existed in accordance with the exclusions and the other provisions set forth in the acknowledgment by Semco dated September 7, 1973.II. Time for Performance 41 In the trial court Semco had argued both that there was no contract to supply materials after 1974, pursuant to an oral agreement, and that the plaintiff, FSM, was seeking to induce Semco to maintain fixed sales prices for an unreasonably long time and to make deliveries at such prices for an unreasonably long time by requesting deliveries after 1974. 42 The district court concluded that a contract existed as a matter of law, and that Semco had promised to deliver materials for a reasonable time; the court instructed the jury that it must return a verdict for FSM if it found, inter alia, that the time requested by Federal Sheet Metal for final delivery of the materials promised by Semco when the contract was entered into in October 1973, was reasonable, considering the nature, purpose and circumstances of such action,   . (Emphasis added.) 43 Our review of the documents convinces us, however, that it was not necessary to infer a reasonable time for performance, as the parties had agreed on a term for delivery. Federal Sheet Metal's purchase order form, under a box labeled date required, stated the trade phrase as released. This phrase was repeated in the Semco acceptance in the date wanted box; the date promised space had been left open. No contrary term is found in the preceding documents of the parties, and we feel that the language of the parties is sufficient to show agreement and Semco's acquiescence to this contractual term. 9 Moreover, there is unrebutted evidence as to the interpretation of this phrase as supplied by trade usage. 10 44 Koenig testified that since the sheet metal trade was a following trade FSM generally bought from vendors on an as-released basis, which required Semco to supply the materials as FSM needed them and as the building was ready. 11 As-released referred to no specific date but was just within the envelope of the life of the job; according to Koenig, the life of the job at that time was January or February 1976. Moodie acknowledged that at the time he submitted Semco's quotations he was fully aware that the completion date of the hospital under the plans was February 1976. 45 In the absence of any other extrinsic evidence or allegation offering a different interpretation of this term, we find that Semco agreed to deliver the ductwork materials on an as-released basis, which, in our opinion, obligated Semco to make deliveries under the contract terms and at the stated price at least until February 1976, which was the anticipated life of the project at that time. 12 The jury should have been so instructed. See Jazel Corp. v. Sentinel Enterprises, Inc., 20 U.C.C.Rep.Serv. 837, 839 (N.Y.Sup.Ct.1976); C. Wright & A. Miller, Federal Practice and Procedure § 2535, at 591 n.9 (1971). Accordingly, FSM is entitled to the damages it incurred due to the failure of Semco to provide the materials as promised until that date. It appears the FSM effected cover in October and December 1974 for the ductwork and soundtraps by contracting with two other suppliers, U. S. Air Duct Corp. and Bartholomaus Enterprises. However, Federal Sheet Metal has not sought a directed verdict on the measure of damages, and admits a bona-fide controversy over some elements of FSM's damages. We therefore leave the assessment of damages, the appropriateness of the cover and the legitimacy of incidental damages as issues to be resolved in a new trial. FSM has conceded that offsets should be excluded from the assessment of damages. 46 We conclude that evidence of Semco's repudiation and breach, viewed most favorably to Semco, requires us to conclude that Semco did refuse to perform, that there is insufficient evidence to permit any other finding, and that the jury should have been so instructed on this point. Correspondence beginning in May 1974 clearly shows Semco's unwillingness to perform under the terms of the contract as we have found existed at that time. (Semco wrote on May 24, 1974: (Y)ou (FSM) should look elsewhere for a source of supply for this project); despite FSM's encouragement to Semco to perform as the easiest way for both of us and probably the least expensive to you, Semco replied that it had lost all interest in doing the work on a lump sum price basis. Semco has not pointed to any contradictory evidence or evidence which indicates that it was willing to perform the contract as agreed upon. 47 In accordance with our conclusions that a contract existed as a matter of law to deliver materials through February 1976, and that the seller repudiated and breached that contract, we reverse and remand for a new trial limited to the issue of the buyer's damages.