PROBLEM: WHEN IS A PRICE SOLICITATION AN OFFER?

On September 21, 2002, Defendant, a grain dealer in Oregon, mailed a sample of clover seed to numerous parties, including Plaintiff, a grain wholesaler in Wisconsin. The following language appeared on the face of the envelope containing the seed: "Red clover. 50,000 lbs. like sample. I am asking 24 cents per pound, f.o.b. Amity, Oregon." Plaintiff acknowledged receipt of the sample and advised Defendant that it had accumulated quite a stock of clover seed and preferred to wait a while before "operating further."

After rains created unfavorable hulling conditions, Defendant, on October 4, contacted Plaintiff again and Plaintiff responded: "Special deliver sample received. Your price is too high. Wire firm offer, naming absolutely lowest f.o.b." On October 8, Defendant telegraphed Plaintiff as follow: if am asking 23 cents per pound for the car of red clover seed from which your sample was taken. No. 1 seed, practically no plantain whatever. Have an offer 22 per pound, f.o.b. Amity.

Plaintiff promptly telegraphed "We accept your offer" and gave shipment instructions. Plaintiff also resold the clover seed to a third party at a profit. Defendant, however, sold the carload to another buyer and refused to deliver.

Plaintiff sued Defendant for damages. The court held that Defendant had made no offer and dismissed the petition. In essence, the trial court concluded that from the language "am asking in the telegram of October 8 Defendant should have known that Plaintiff was still soliciting offers to bus rather than making an offer to sell. Even though all other material terms were stated, the implication was that Defendant must say "I will sell to you" before any offer to sell was made.

The case is now on appeal. A partner in the firm you work for has asked you, her associate, to help develop a theory to reverse the trial court. She has given you a Memo to get you going:

Memo:

1. This case is governed by Article 2 of the UCC, but the code does not define offer. See UCC S 2-204, 2-205, 2-206, 2-207. How do we decide what is an offer in a purported contract to sell goods? My impression is that if Article 2 does not displace the common law, common law concepts apply under UCC 1-103(b). If that is correct, what definition would apply? That in Restatement (Second) 24? This result finds support in Cannavino & Shea, Inc. u. Water Works Supply Corp., 361 Mass. 363 (1972) and, more recently, in Architectural Metal Systems, Inc. v. Consolidated Systems, Inc., 58 F.3d 1227 (7th Cir. 1995) (Illinois law).

2. The trial court's decision is somewhat rigid. Is there any way to persuade the appellate court that the reasonable meaning of language used early in the negotiations, i.e., "am asking," may change as the discussions proceed? For example, if the seller uses "am asking" late in the negotiations and knows or has reason to know that the buyer will take him seriously, is there any responsibility to clarify that the seller is still soliciting?