Question

Standard Bent Glass wanted to buy a machine for its factory that would produce cut glass. In March 1998, it started negotiations with Glassrobots Oy, a Finnish corporation. By February 1999, negotiations had reached a critical juncture. On February 1, Standard Bent Glass faxed an offer to purchase a glass fabricating system from Glassrobots. The offer sheet began, "Please find below our terms and conditions related to ORDER #DKH2199," and defined the items to be purchased; the quantity; the price of $1.1 million; the payment terms; and installation specifics, instructions, and warranties. The letter concluded, "Please sign this ORDER and fax to us if it is agreeable." On February 2, Glassrobots responded with a cover letter, invoice, and standard sales agreement. The cover letter recited: "Attached you'll find our standard sales agreement. Please read it through and let me know if there is anything you want to change. If not, I'll send 2 originals, which will be signed." The contract included an arbitration clause and several references to arbitration. Glassrobots did not return, nor refer to, Standard Bent Glass's order. Later that day, Standard Bent Glass faxed a return letter that began, "Please find our changes to the Sales Agreement," by which it meant Glassrobots's standard sales agreement. This letter apparently accepted Glassrobots's standard sales agreement as a template and requested five specific changes. The letter closed, "Please call me if the above is not agreeable. If it is we will start the wire today." On February 4, Standard Bent Glass wired the down payment to Glassrobots, and on February 8, the wire transfer cleared Glassrobots's bank account. On February 5, Glassrobots sent Standard Bent Glass a revised sales agreement that incorporated almost all of the requested changes. Glassrobots's cover letter stated, "Attached you'll find the revised sales agreement....Please return one signed to us; the other one is for your files." A provision of this agreement stated that "this Agreement shall come into force when signed by both parties." Standard Bent Glass never signed the agreement. On February 9, Standard Bent Glass sent another fax to Glassrobots in which it stated, "Just noticed on our sales agreement that the power is 440 6 5. We must have 480 6 5 on both pieces of equipment." There was no further written correspondence after February 9 and no contract was ever signed by both parties. Nevertheless, both parties continued to perform. Glassrobots installed the glass fabricating system and Standard Bent Glass made its final payment to Glassrobots. Standard Bent Glass noticed defects in the equipment, and the parties disputed the cause of the defects. Standard Bent Glass sued Glassrobots. Glassrobots claimed that the contract between the parties included an arbitration clause under an appendix to the standard sales agreement. Did it?



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  • CreatedJuly 16, 2014
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