In The Matter Of The Arbitration Between Doughboy Industries Inc.

233 N.Y.S.2d 488 (1962)

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Nature of the Case

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Facts

Pantasote Company (P), seller, had done business with D on two occasions. On those occasions, D used its purchase-order form with its insulating conditions, and P used its acknowledgment form with its self-actuating conditions. Each ignored the other's printed forms but proceeded with the commercial business at hand. On this transaction, D mailed to P two purchase orders. Each purchase order provided that some 20,000 pounds of film were to be delivered on specified dates. Further quantities were ordered on a 'hold basis,' that is, subject to 'increase, decrease, or cancellation' by D. P orally accepted both purchase orders without change except to suggest immediate shipment of the first part of the order. D agreed to the request. P shipped some 10,000 pounds of film in partial fulfillment of one purchase order. Three days later, D received P's first acknowledgment dated May 13, 1960, the day the product was shipped, and on May 19, 1960, the seller's second acknowledgment dated May 16, 1960. Although the purchase orders called for written acceptances and return of attached acknowledgments by P, no one paid any attention to these requirements. No one, orally or in writing, objected to the conditions printed on the other's commercial form. A dispute arose over whether D is bound to accept all the goods ordered on a 'hold basis.' P sought mandatory arbitration as per its terms. D’s forms stated that purchase-order terms could only be altered in a writing signed by D. Ps' form stated that D would be subject to the terms of the acknowledgment unless D objected to the terms within 10 days. Among the conditions on the reverse side of P’s form is a general arbitration clause. D tried to change the on-hold part of the orders, and P objected and filed suit. P claimed arbitration was mandatory, and D claimed it could litigate and moved to stay arbitration. The court ruled for P and D appealed.