Corinthian Pharmaceutical Systems, Inc. v. Lederle Laboratories

724 F.Supp. 605 (1989)

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Nature of the Case

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Facts

Lederle Laboratories (D) is a manufacturer and distributor of drugs including DTP vaccine. Corinthian (P) is a distributor of drugs who buys from manufacturers and then resells the product to doctors and other providers. P buys DTP from D. During this period of time the largest single order P ever placed with D was for 100 vials. When D filled P orders, it sent an invoice to P which contained the specifications of the transaction and at the front along the bottom there was boilerplate that the transaction was governed by the seller’s standard terms and conditions of sale set forth on the back, notwithstanding any provisions submitted by the buyer. Acceptance of the order was expressly conditioned on the buyer’s assent to seller’s terms and conditions. Product liability lawsuits over DTP increased, and insurance became difficult to procure. In 1986, D decided to self-insure. To do this D decided that a substantial increase in the price of the product was necessary. To that end, D announced that effective May 20, 1986, the price of DTP would rise from $51.00 to $171.00 per vial. This notice was done by an internal pricing memo and P did not know of the existence of the letter until D’s representative presented it to P several weeks after May 20, 1986. D wrote a customer letter on May 20, 1986, but P gained knowledge of that letter one day before. In response to this impending increase, P ordered 1,000 vials of DTP from D. This order was placed on D’s telephone computer ordering system. P got a tracking number for the order and P sent D two written confirmations, and on each confirmation, P stated that its order was to get the $64.32 price per vial. On June 3, 1986, D sent an invoice to P for 50 vials of DTP at $64.32 per vial. Another letter was then sent regarding DTP and this letter stated that the enclosed was a partial shipment which was placed on May 19^th and that the standard terms and conditions would be to invoice the order at the price when shipment was made but in light of the magnitude of the price increase, D decided to make an exception and ship a portion of the order at the lower price. The letter then informed P that the balance of the order would be priced at $171.00 and that shipment would be made on June 16^th. The letter also informed P that if he wanted to cancel it should be done on or before June 13^th. P sued D for specific performance of the 950 vials that D chose not to deliver. D moved for summary judgment; no contract for the sale of 1,000 vials had been formed. D also argued that if a contract was formed, it was governed by its terms and conditions and it sent P the 50 vials as an accommodation.