TO: Professor
FROM: Student
RE: Memo
ISSUES
1) The purpose of this Memo is to evaluate, under a contractual relationship between our client, J.L. Stanley Manufacturing (“Stanley”) and J.C.C. whether (i) JCC’s contract bid formed the basis of the agreement between the parties, or (ii) whether JCC’s bid was incorporated by reference into the parties’ agreement by operation of our client’s purchase order (or PO), and therefore the PO should be deemed the basis of such contractual relationship between the parties.
2) Further, this Memo also intends to assess whether our client breached the service contract entered into by our client and JCC as per the above, considering that J.C.C’s bid terms provided on June, 9th, 2014 contained a “right to cure provision” to JCC’s benefit, which was allegedly not observed by Stanley.
SHORT ANSWERS
A court will likely find that Stanley did not breach the contract with JCC when it refused to accept JCC’s offer to cure the defective work. Although there is indeed a contract, we find that the contract was formed by incorporation of JCC’s bid into Stanley’s purchase order, however such incorporation of JCC’s bid into Stanley’s PO was limited - which means such incorporation referred only to the purpose contained in Stanley’s PO. Thus, not all of the JCC’s bid terms became part of Stanley’s PO; but rather only those ones that the PO expressly incorporated or mentioned.
As the “right to cure a breach” (which was part of the JCC’s bid) was not expressly incorporated into Stanley’s PO, it was not made part of the final agreement between the parties, and therefore it is not subject to being breached by our client.
2) After analysis, as briefly explained above, we are of the opinion that our client’s PO incorporated the terms of JCC’s bid, but only in regards to those matters specifically mentioned in our client’s PO. All the other terms not expressly incorporated were rejected by our client, including but not limited to the terms referring to JCC’s right to cure a breach.
FACTS
Our client was in need of a complex service to be performed in our client’s new reactors. Our client sought for bids for such services from several contractors who represented themselves as competent in performing such service.
On June 9th, 2014, JCC issued a bid for the service, for the price of USD 93,475.00. Such bid also (i) contained the specification for such project and (ii) provided that JCC retained the right to cure any defective work. On June 17th, 2014, JCC sent an additional letter containing several details pertaining to the performance of the service.
After that, our client awarded to the contract to JCC by means of issuing a purchase order, which terms, among others, were: (i) the labor and materials should be provided by JCC in accordance with the specification contained in JCC’s bid dated June 9th, 2014; (ii) the work should be performed using time and material as per what was outlined in JCC’s letter dated June 17th, 2014.
The PO issued by our client also stated that the goods and services were to be purchased in accordance with the PO, including the terms and conditions contained in the reverse side of the PO. Such additional terms in the reverse side of the PO added that “any additional or different terms proposed by JCC in any quotation, offer or otherwise are rejected unless expressly asserted in writing by Stanley”.
JCC signed the PO without any objection. JCC commenced the provision of the services on July 28th, 2014 and finished on August 23rd, 2014. On the day after the work was completed by JCC, Stanley performed an inspection that revealed that the service was performed contrary to express instructions of the manufacturer and that the service could not be corrected.
JCC sent a letter to our client on August 25th, 2014 informing that JCC was would make all the necessary arrangements to repair the service and that the costs incurred with such correction in excess of the price of the service would
