Empire Machinery Co. v. Litton Business Telephone Systems

566 P.2d 1044 (Ariz. 1977)


Empire (P) became interested in acquiring an interconnect telephone system. P contacted Litton (D), a manufacturer and seller of interconnect systems. During the visit by the salesman, P was told about the new Superplex switching system which would be available in about a year. On June 5, 1973, D submitted a proposal to P, which was rejected. Negotiations continued until July 30, 1973 when D’s salesman sent a letter to P which stated that if P sent a signed order and deposit, D would install a Common Control Crossbar Telephone System and that system would be replaced with the Superplex system at P’s request and at no further cost. P then entered into a contract with Litton (D) to install a new 'Superplex' interconnect telephone system. In June, P sent a check of $8,546.00 for the down payment on the system along with a signed 'Equipment Sales Agreement' in which there was a home office acceptance clause in D's favor. It is acknowledged that D’s salesman did not sign this portion of the contract. It is also acknowledged that P read and understood the home office acceptance clause. The estimated date for installation was set for November 15, 1973. On August 9th, P was then requested by D’s salesman to send a form letter to Mountain Bell in order to install the interconnect system so that D could act as P’s representative. That form letter indicated that D had entered into a contract with P for the installation of an interconnect telephone system. On August 30th D wrote Mountain Bell again indicating that D had entered into a contract with P. At D's request P purchased $12,000 in equipment. On December 3, 1973, the service manager of D requested Mountain Bell to supply a new telephone number for D to be put in service as of December 21, 1973. Nothing further was done by either party after that date. D never installed the system because it was never completed. D informed P of this. P bought another interconnect system and then P sued D for damages. P contends that the letter of July 30th signed by D’s salesman constituted an offer to sell. D moved for a summary judgment based on the fact that it had not accepted the contract with P as specified in the sales agreement. The trial court granted judgment for D and P appealed.