Chicopee Concrete Service, Inc. v. Hart Engineering Co.

• Decision Date: 03 July 1985
• Citation: 20 Mass.App.Ct. 315,479 N.E.2d 748
• Parties: , 42 UCC Rep.Serv. 375 CHICOPEE CONCRETE SERVICE, INC. v. HART ENGINEERING COMPANY.
• Court: Appeals Court of Massachusetts

Page 748

479 N.E.2d 748

20 Mass.App.Ct. 315, 42 UCC Rep.Serv. 375

CHICOPEE CONCRETE SERVICE, INC. v. HART ENGINEERING COMPANY.

Appeals Court of Massachusetts Suffolk.

Argued Feb. 6, 1985.

Decided July 3, 1985.

Peter J. Gagne, Boston, for plaintiff.

Francis M. Lynch, Boston, for defendant.

Before PERRETTA, KAPLAN and DREBEN, JJ.

PERRETTA, Justice.

The defendant (Hart) was awarded a contract by the city of Holyoke for the construction of a waste water treatment plant. In preparing its bid, Hart used prices for concrete that had been submitted to it by the plaintiff (Chicopee), a concrete supplier and Hart's proposed subcontractor. The general conditions of the contract between the city and Hart provided that all subcontracts were subject to the approval of the engineering firm (Tighe & Bond/SCI, hereinafter Tighe) representing the city. When approval of Chicopee was not given, Hart selected another subcontractor, and Chicopee brought this action for breach of contract against Hart. Both parties moved for summary judgment; Chicopee's motion was limited to the issue of liability. The judge concluded that, although there was a valid contract between Chicopee and Hart, that contract was subject to approval by the city's engineering firm. Because approval was denied, Hart did not wrongfully terminate the contract. We conclude that the approval clause in the prime contract was not made a part of the enforceable contract between Hart and Chicopee and reverse the judgment.

I. The Undisputed Facts.

In preparing its bid for the city's construction project, Hart requested Chicopee's price quotations for cement. By letter to Hart, dated September 12, 1978, Chicopee quoted its prices which, in turn, were used by Hart in calculating its bid on the project. On November 2, 1978, Hart directed a letter to Chicopee which contained three statements here important:

(1) "This will confirm our intention to award the purchase order for the following: ... [list of concrete mixes and prices]."

(2) "This award will be subject to our receiving a formal contract from the proper awarding authorities."

(3) "Your attention is directed to the Contract & General Conditions, Supplementary General Conditions, Special Conditions, Information for Bidders, and the Technical Specifications which will be made a part of your purchase order. You are specifically cautioned to fully comply with all the requirements pertaining to Nondiscrimination in Employment and the President's Executive Order 11246."

In anticipation of working on the project, Chicopee expanded its facilities and purchased new equipment. The city awarded Hart the prime contract on December 20, 1978, and on January 25, 1979, Hart sent its purchase order to Chicopee, the first paragraph of which reads, in pertinent part: "Furnish all materials and equipment to perform the 'SCOPE OF WORK' hereto attached in strict accordance with plans and specifications entitled 'Holyoke Wastewater Treatment Plant Improvements' ... as prepared by Tighe & Bond/SCI, including all drawings listed therein ... General Terms & Conditions, codes, and other publications referred to therein." Chicopee added qualifications to two of the terms of the purchase order, ¹ which it then signed and delivered to Hart, along with the usual and necessary bonds, on March 19, 1979. At that time, Chicopee was unaware that four days earlier, March 15, 1979, Tighe had rejected Hart's proposal to use Chicopee as the concrete supplier. Hart withdrew its purchase order to Chicopee on March 21, 1979.

II. The Hart-Chicopee Contract.

The judge concluded that "[a]n enforceable contract was formed" between Chicopee and Hart "upon the issuance" of Hart's purchase order of January 25, 1979. We agree with this conclusion and the following reasoning upon which it rests.

A subcontract for the sale of concrete is controlled by G.L. c. 106, the Uniform Commercial Code. See Mishara Constr. Co. v. Transit-Mixed Concrete Corp., 365 Mass. 122, 124, 310 N.E.2d 363 (1974). Section 2-204(1), inserted by St.1957, c. 765, § 1, provides: "A contract for sale of goods may be made in any manner sufficient to show agreement, including conduct by both parties which recognizes the existence of such a contract." Chicopee, on September 12, 1978, in response to a request from Hart, had submitted a price list which Hart used in preparing its bid on the prime contract. Hart advised Chicopee on November 2, 1978, that it intended to award Chicopee the purchase order if it were awarded the contract by the city. In anticipation of the purchase order, Chicopee expanded its facilities. "An offer is made when the offeror leads the offeree to reasonably believe that an offer has been made. Timmins v. F.N. Joslin Co., 303 Mass. 540 ... (1939). Kuzmeskus v. Pickup Motor Co., 330 Mass. 490 ... (1953)." Gilbert & Bennett Mfg. Co. v. Westinghouse Elec. Corp., 445 F.Supp. 537, 545 (D.Mass.1977). Thus, Chicopee's price list was accepted by Hart, see Loranger Constr. Corp. v. E.F. Hauserman, 376 Mass. 757, 762, 384 N.E.2d 176 (1978) (use of one's estimate by another in submitting a bid can constitute acceptance of an offer, even without notification to the offeror), and there was, as of November 2, 1978, at the very least, an agreement subject to the drafting of the purchase order, that is, a "formal memorial of the terms." ² Nigro v. Conti, 319 Mass. 480, 482, 66 N.E.2d 353 (1946). See also Sands v. Arruda, 359 Mass. 591, 594, 270 N.E.2d 826 (1971).

Hart relies upon various cases ³ to argue that the letters of September 12 (Chicopee's price list) and November 2 (Hart's response) were mere steps in the negotiation process. However, a reading of those cases shows them to be distinguishable on the basis of the writings therein involved and the conduct of the parties in light of the writings.

Moreover, even were we to view Hart and Chicopee's letters and conduct as mere negotiation, we would nonetheless conclude that Hart's purchase order constituted a valid contract. See Mishara Constr. Co. v. Transit-Mixed Concrete Corp., 365 Mass. at 124, 310 N.E.2d 363. Hart argues that, because Chicopee changed the terms of the purchase order, see note 1, supra, there was no acceptance by Chicopee, and hence, no contract. As we read G.L. c. 106, § 2-207(1) and (2), ⁴ Chicopee's insertions only raise the question whether those terms become parts of the contract between Hart and Chicopee. See Leonard Pevar Co. v. Evans Prod. Co., 524 F.Supp. 546, 549-552 (D.Del.1981); Gord Indus. Plastics v. Aubrey Mfg., Inc., 103 Ill.App.3d 380, 385-386, 59 Ill.Dec. 160, 431 N.E.2d 445 (1982). See also 2 Anderson, Uniform Commercial Code § 2-207:12 (3d ed. 1982). Although that question may or may not be relevant to the issue of damages (keeping in mind the nature of Chicopee's insertions and the fact that the contract was repudiated before performance commenced), it does not alter the fact that there was a valid contract between Hart and Chicopee.

III. The Breach.

Whether Hart was justified in withdrawing its purchase order after Tighe rejected Chicopee as a concrete supplier turns on whether the owner-approval clauses ⁵ of the prime contract had been made part of the contract between Hart and Chicopee. The judge concluded that the purchase order "effectively incorporated the provisions of the prime contract in the subcontract." ⁶ We do not agree.

In the absence of unambiguous and appropriate language in the purchase order incorporating either the owner-approval clause or the prime contract in its entirety, all that is impliedly incorporated into the subcontract is the obligation of the subcontractor to perform as the general contractor is bound to do "in relation to the particular part of the work to be performed." Vappi & Co. v. Sullivan, 331 Mass. 463, 467, 120 N.E.2d 203 (1954). See John Soley & Sons v. Jones, 208 Mass. 561, 566-567, 95 N.E. 94 (1911).

If there was wholesale incorporation of the terms of the prime contract into the purchase order, it must be by reason of the purchase order's proviso that Chicopee was to "[f]urnish all materials and equipment required to perform the 'SCOPE OF WORK' ... in strict accordance with plans and specifications [of the prime contract], including ... [the] General Terms and Conditions ..." We do not see in this language, notwithstanding the reference to the "General Terms and Conditions" and, hence, art. 58, as well as paragraph HH of art. 80 of the "Special Conditions," anything other than an incorporation of those terms of the prime contract which are germane to the work to be performed by the subcontractor in behalf of the contractor. See Frederick Raff Co. v. Murphy, 110 Conn. 234, 240, 147 A. 709 (1929) ("The securing of the consent of the engineers in charge of the work to the making of the...