Opinion ID: 2103439
Heading Depth: 1
Heading Rank: 4

Heading: The Purchase Order

Text: The question of completeness is actually the second of two concerns relevant to whether, and to what degree, the purchase order is an integration. (See J. Calamari & J. Perillo, Contracts § 3-2, at 103 (2d ed. 1977).) The first is whether the purchase order is a final expression of the agreement between J & B and Iber. See J. Calamari & J. Perillo, Contracts § 3-2, at 101 (2d ed. 1977). It is such an expression. The allegations of J & B's complaint, assumed true for purposes of Iber's motion to dismiss, imply that J & B began its performance without responding to the purchase order. That is sufficient as to the question of finality. (See J. Calamari & J. Perillo, Contracts § 3-2, at 102 (2d ed. 1977) (noting that a letter of confirmation generally acts as an integration if the other party makes no response to it at least prior to performance).) The purchase order is therefore an integration, leaving only the question of the completeness of its expression. See J. Calamari & J. Perillo, Contracts § 3-2, at 103 (2d ed. 1977). As a complete expression, or total integration, the parol evidence rule would preclude J & B's attempts to supplement what is provided in the purchase order through evidence of alleged understandings reached in the telephone proposal. (See J. Calamari & J. Perillo, Contracts § 3-2, at 101, 103 (2d ed. 1977).) But as only an incomplete expression, or partial integration, supplementation by additional, consistent terms would not be precluded. See J. Calamari & J. Perillo, Contracts § 3-2, at 101, 103 (2d ed. 1977). The purchase order consists of five pages. The first four contain typewritten provisions pertaining to the work J & B was engaged to perform, namely, installation    of reinforcing steel, post-tensioning and welded wire fabric. The fifth page is not addressed specifically to either J & B or that performance. It contains additional provisions not unlike the standardized terms found in form contracts. Those provisions pertain to J & B's general responsibilities as a subcontractor engaged by Iber. The provisions contained on that page, as might be expected given their standardized nature, reveal nothing as to July 31, 1990. Reference to the telephone proposal appears near the top of the purchase order's first page. It was accomplished by tailoring, through typewritten overstrikes and insertions, a sentence containing blank spaces. Uncompleted, the sentence would have appeared as follows: ENTER THE FOLLOWING ORDER IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF YOUR _____ ______________________________ SHIPMENT OR INSTALLATION TO BE COMPLETED _____________. As altered, the sentence reads: ENTER THE FOLLOWING ORDER IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF YOUR telephone proposal on 12/4/89 by Terry Estes with Jerry Leander SHIPMENT OR INSTALLATION TO BE COMPLETED begin as required by job progress. Immediately below that sentence are two paragraphs generally outlining J & B's responsibility to [f]urnish all labor to complete the installation in accordance with various drawings and documents identified. Beneath those paragraphs is a list of particular responsibilities. Relevant here, J & B was made responsible for providing a [f]ull time foreman, experienced in post-tensioned concrete    through July 31, 1990. J & B was also responsible for [s]upply[ing] sufficient manpower and supervision to keep the job on schedule as agreed upon. J & B's responsibility to provide supervision was the subject of a second reference in a section of the purchase order denoted Notes containing additional particulars. That reference required J & B to provide supervision while [its] work [was] in progress. Iber accurately points out that the absence of a completion date for J & B's performance would not necessarily prevent the purchase order from being a total integration. (See Armstrong, 301 Ill. at 106, 133 N.E. 711 (noting that if a writing shows itself to be a complete expression, parol evidence cannot be admitted to add another term, though the writing may contain nothing regarding it particularly).) But it is the conspicuous absence of such a date which shows, in view of the provisions above, that the purchase order cannot be considered a complete expression of the parties' agreement. Constructive deletion of the word COMPLETED and insertion of terms regarding the commencement of J & B's performance in the reference might arguably indicate an intent against the inclusion of a specific completion date. But the argument fails in view of the reference conditioning that direction, and, indeed, the entire purchase order, on what was discussed between the parties three days earlier over the telephone. And, as the appellate court noted, there is no language indicating that the terms earlier discussed were merged into the purchase order's provisions. The reference to the telephone proposal and the absence of a merger clause is the first and foremost reason to conclude that the purchase order does not embody all of the understandings reached by the parties. A second reason is found in the consistent construction of the provisions pertaining to J & B's responsibility regarding supervision of its work and requests to extend the time of performance. J & B was to provide supervision for the duration of its performance on the project, that is, until the date its work was completed. But, in requiring J & B to supply a full-time foreman only through July 31, 1990, the purchase order reveals an expectation that the date for that performance would be on or before July 31, 1990. Such an expectation is also critical to making sense of the provision contained in paragraph J of the purchase order's fifth page. Paragraph J permits J & B to request a time extension in the event of a delay. Such an extension would necessarily have to be premised on a targeted completion date for J & B's performance. The absence of such a date is most reasonably explained by the conclusion that the purchase order is but a partial integration. That is the conclusion we reach. The parol evidence rule therefore cannot preclude J & B from offering proof of terms allegedly agreed to during the telephone proposal that are consistent with and would supplement, but not contradict, the purchase order. Consideration has so far centered on J & B's allegation that, at the price stated in the purchase order, it was not obligated to work beyond July 31, 1990. Like other legally sufficient allegations of J & B's complaint, that must ultimately be determined by a trier of fact. A finding of that allegation as fact is, as the appellate court noted, crucial to the consideration of the other arguments raised by Iber to support dismissal of the complaint. The No Damage for Delay Clause Paragraph J mentioned above also purports to exempt Iber for liability to J & B for any damages of any kind for any delays by any    cause whatsoever. Iber argues that even if as J & B alleged, it was Iber's fault that J & B could not meet a completion date, paragraph J would preclude J & B from recovering damages. Indeed, the provision might, depending on proof as to what caused the alleged delay. Such exculpatory clausescommonly referred to as no-damage-for-delay clauses are enforceable though they are construed strictly against those who seek their benefit. (See Annot., 74 A.L.R.3d 187, 200-01 (1976).) But we are presently concerned only with whether the allegations of J & B's complaint, taken as true, state a legally sufficient cause of action. Relevant to that determination are certain exceptions to no-damage-for-delay clauses. (See generally Annot., 74 A.L.R.3d 187 (1976).) The exceptions, one or more of which operate in most jurisdictions, are employed to avoid the harshness of such clauses, particularly those sweeping as broadly as the one here. (See Annot., 74 A.L.R.3d at 200-01.) This court generally acknowledged the exceptions in Bates & Rogers Construction Corp. v. Greeley & Hansen but has never had an opportunity to address which, if any, should be recognized in Illinois. See Bates & Rogers Construction Corp. v. Greeley & Hansen (1985), 109 Ill.2d 225, 230, 232, 93 Ill.Dec. 369, 486 N.E.2d 902 (noting the case involved no argument for application of the exceptions but that its holding was not inconsistent with decisions in other jurisdictions, one of which recognized an exception for bad faith or gross negligence); but see John Burns Construction Co. v. City of Chicago (1992), 234 Ill.App.3d 1027, 1033, 176 Ill.Dec. 326, 601 N.E.2d 1024 (including the decision in Bates with appellate decisions stating that exceptions have been recognized in Illinois). Our appellate court has, however, had such opportunity. It has stated exceptions exist for delay caused by bad faith, delay not within contemplation of parties, delay of unreasonable duration, and delay attributable to inexcusable ignorance or incompetence of engineer. (See John Burns Construction Co. v. City of Chicago (1992), 234 Ill.App.3d 1027, 1033, 176 Ill.Dec. 326, 601 N.E.2d 1024) (citing the sum total of appellate decisions to date on the issue). The first two of the exceptions recognized generally by our appellate court fall within those more or less universally acknowledged. (See Annot., 74 A.L.R.3d at 201.) The circumstances of this case make relevant those two exceptions; the first because it is applicable to the allegations of J & B's complaint, and the second because it served as the basis for the appellate court's decision on the issue here. (See 246 Ill.App.3d at 529-30, 187 Ill.Dec. 197, 617 N.E.2d 405.) We therefore address the scope of those exceptions and determine whether they should operate in this State. We decline, however, to similarly examine the other exceptions recognized by our appellate courtthose for delays of unreasonable duration and delays attributable to inexcusable ignorance or incompetence of engineeras they are not so implicated. Contracting parties are generally empowered to define the limits of their respective obligations. And courts may not arbitrarily create exceptions to provisions found in private contracts which effectively supplant that power. (See, e.g., Underground Construction Co. v. Sanitary District (1937), 367 Ill. 360, 371, 11 N.E.2d 361 (acknowledging the parties themselves had addressed the issue of damages for delay in their contract).) Thus, one measure of any judicially created exception's validity is the extent to which it avoids a harsh result yet honors the notion that merely bad bargains are beyond the concern of courts. Both of the exceptions relevant here meet that test.