LAWS 3003 Lecture Notes - Lecture 3: Purchase Order, Telex Communications, Standard Form Contract
Document Summary
Week 3: when contractual obligations arise part ii: Butler machine tool co. made and sold machine tools. They sent a letter to ex-cell-o on may 23, 1969 offering ex-cell-o some new machinery for 75,535. With it, was butler"s standard contract terms which included a price variation clause, so if their manufacturing costs went up, that price rise would be passed on to ex-cell-o. Ex-cell-o replied on may 27 and said they would order the machinery, but on ex- Ex-cell-o"s standard terms did not have a price variation clause. Butler replied on june 5 on the tear-off slip from ex-cell-o"s terms. A while later, nothing further had been said, and butler delivered the machinery. They asked for 75,535, plus 2,892 according to their price variation clause. The lower court held that the seller"s price variation clause continued through the whole dealing and so the sellers were entitled to rely upon it.
