Allied Steel and Conveyors, Inc. v. Ford Motor Co.
United States Court of Appeals, Sixth Circuit, 1960
Author: Jim

Sequence of events:

-August 19, 1955- Ford ordered machinery from allied.  In the purchase form, stated that if Allied has to install machinery on Ford’s premises, Allied responsible for negligence of its employees.  Also attached a form 3618, Allied also responsible for Ford’s employees, but has “VOID” on it.

-July 16, 1956- Ford submitted an amendment to Allied proposing purchase of further machinery. Amendment stated: “This purchase order agreement is not binding until accepted.  Acceptance should be executed on acknowledgement copy which should be returned to buyer.”  This amendment also had form 3618 attached, but this time no “VOID”.

-September 5, 1956- An employee of Allied injured by negligence of an employee of Ford. 

-November 10, 1956- Acknowledgement copy of Amendment executed by allied.

-November 12, 1956- Ford received this acknowledgement.

Procedure: The employee brought suit against Ford and Ford in turn impleaded Allied, relying on Form 3618 attached to the amendment.  Trial verdict for employee against Ford and for Ford against Allied.

Plaintiff’s Argument: There was no contract between Ford and Allied when the injury to the employee occurred.  Allied had not accepted the offer of Ford when the accident occurred because it had not sent Ford the written acknowledgement.  Furthermore, Ford could have backed out of the deal anytime before written acknowledgement was sent.

Issue: Was there a contract between F and A at the time injury took place?

Holding: Yes

Rationale:  According to the court, the written acknowledgement was not an exclusive method of acceptance.  According to the ct., “…it has been held that if the offeror prescribes an exclusive manner of acceptance, an attempt on the part of the offered to accept the offer in a different manner does not bind the offeror in the absence of a meeting of the minds on the altered type of acceptance.  On the other hand, if an offeror merely suggests a permitted method of acceptance, other methods of acceptance are not precluded.”  The ct reasoned that when Allied started working on Ford’s second order with Ford’s knowledge, acceptance was communicated and contract was formed.  As to the second argument that Ford could have backed out any time before November 12, it is just not true.  When Allied had started work on Ford’s second order, a K was formed and Ford could not have backed out without incurring liability. Affirmed.