State v. U.S. Oil Co., Inc.
| Decision Date | 08 November 1989 |
| Docket Number | No. A89A0940,A89A0940 |
| Citation | 194 Ga.App. 1,389 S.E.2d 498 |
| Parties | STATE of Georgia v. U.S. OIL COMPANY, INC. |
| Court | Georgia Court of Appeals |
Michael J. Bowers, Atty. Gen., H. Perry Michael, Executive Asst. Atty. Gen., Verley J. Spivey, William C. Joy, Senior Asst. Attys. Gen., Grace E. Evans, Asst. Atty. Gen., for appellant.
Greene, Buckley, Derieux & Jones, John D. Jones, J. Russell Phillips, for appellee.
This is an interlocutory appeal from the denial of appellant's motions for judgment on the pleadings and summary judgment in appellee's suit alleging breach of a contract to sell regular grade gasoline to agencies of the State of Georgia. Finding that appellant was entitled to judgment as a matter of law, we reverse the denial of its motion for summary judgment.
Appellant issued invitations to bid for contracts to supply petroleum products to state agencies. The terms of the proposed contracts provided that they would be non-exclusive, that is, that the contracts were for the convenience of the State and that the State could purchase like goods from other vendors. Appellee submitted a bid for the contract to provide regular grade gasoline, but in a portion of the bid denominated "Exceptions," it specified that its offer was contingent on a requirement that the State buy all of the specified product from it. The State subsequently notified appellee that it had been awarded the contract and delivered an executed copy of the contract to an agent of appellee. The contract, which still contained the non-exclusivity provision, was performed by appellee for several months without comment regarding the non-exclusivity language. Then, apparently concerned about the effect of that language, appellee sought assurance from appellant that the contract actually required the State to buy all its requirements of regular grade gasoline from appellee. In response, an employee of appellant's Department of Administrative Services (DOAS) wrote two letters giving just such assurances. Subsequently, because of decreases in the price of gasoline, appellant began purchasing premium grade gasoline from other sources instead of the regular grade gasoline it had contracted to buy from appellee. This suit was brought for breach of that contract.
Appellant relies on the plain language of the contract which permits it to purchase gasoline elsewhere. Appellee argues, however, that the contract must be read to be consistent with its bid because the bid was expressly made contingent on a requirement that the State buy all of its regular grade gasoline from appellee. The effect of that contingency, appellee insists, is to prevent a contract from coming into being unless the terms of the contract were consistent with the bid. We find that basic principles of contract law require a conclusion contrary to appellee's position. Where one party makes an offer and the other party purports to accept that offer, but with material changes in the terms, the second party has made a counteroffer which, if accepted, constitutes a contract between the parties. Frey v. Friendly Motors, 129 Ga.App. 636, 637, 200 S.E.2d 467 (1973). Performing under the contract constitutes acceptance of the offer. Classic Restorations v....
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