Busy electrical contractors send out requests for quotations and purchase orders to vendors on a regular basis, often daily. In return, they receive written acknowledgments of order forms and signed delivery tickets. Many of these forms have preprinted terms and conditions, usually on the back side and often in small print. When was the last time you looked at these clauses—both your own and those of your vendors? What if these terms don’t jibe with each other?

This month’s article is a story based on a recent decision by a federal court of appeals: Borg Warner PDS v. Parker Hennifin Corp. (U.S. Ct. App. 6th Cir. 2025). Follow my description of events and the issues that arose in determining whether there was a contract of sale and what terms and conditions should be used.

Where’s the contract?

Static Electric is an electrical contractor that owes part of its success to its public school projects division. Several new school contracts were advertised and Static wanted to make sure its bids were as competitive as possible. Static contacted its regular supplier, All Sales, with a request for a quotation (RFQ) for its lowest prices on supplies that Static would need if it got the subcontract, though it did not have exact quantities and types of materials defined at that time. This RFQ was not an offer to contract. 

All Sales responded with its quotes, a number of which required that minimum quantities be purchased. The response also said that the quoted prices were subject to change depending on the actual quantities and types of materials in the entire purchase order. All Sales attached its standard terms and conditions (T’s & C’s). 

A few weeks later, Static learned it was the successful bidder on a new high school. Its purchasing manager immediately sent a letter of intent to All Sales that listed the items it needed to start the work. Static wanted a requirements contract, meaning that All Sales would supply materials as needed by Static. The letter of intent contained Static’s standard T’s & C’s, which were different from those previously sent by All Sales. All Sales immediately sent an email to Static that it had started to fill the order. Attached to the email was another copy of All Sales’ T’s & C’s. 

Static sent All Sales a purchase order that contained Static’s T’s & C’s. When All Sales received Static’s purchase order, it began to ship items listed in the purchase order which, upon receipt, were accepted by Static. 

As the project progressed, All Sales raised its prices, saying that it needed to do so because of inflation and the effects of new tariffs. Static objected to the new prices and a lawsuit followed. 

The trial court ruled that the last one to send its T’s & C’s, which was Static, should win. All Sales appealed. This is how the appeals court reasoned through the facts.

1. To have a contract, there needs to be a definitive order (offer), with an acceptance on the same terms as the offer. 
2. Static’s initial RFQ was not a definitive offer. It was conditioned on some future, more detailed purchase order. 
3. When All Sales responded to the RFQ, it did not make a fixed quote (offer) until it had a true purchase order from Static. All Sales’ response was neither an acceptance nor an offer. 
4. Static’s letter of intent was not an offer. Instead, it was an invitation to All Sales to give Static a fixed quotation.
5. All Sales’ email that it was filling the order was neither an offer nor an acceptance of any offer.
6. Static’s purchase order to All Sales was a firm offer to buy, and All Sales’ shipment was an acceptance because it was performing on the offer. All Sales’ T’s & C’s, previously sent to Static as the order was being filled, were now again in Static Electric’s hands. 

The court of appeals ruled that Static and All Sales fully intended to have a contract “because that is what the parties did by shipping and accepting the goods.” The party that was the first and last to receive the other party’s T’s & C’s was not important to the court. However, the court decided that “it is not clear what elements of the parties’ writings” were part of the contract. So, the court sent the case back to the trial court for more testimony to discern the intention of the parties as to the T’s & C’s of the contract. In legal terms, the court of appeals “kicked the can down the road.” 

Lessons learned 

1. Pay attention to your supplier’s responses to your RFQs. 
2. If the supplier puts in different T’s & C’s from yours, send an objection to the supplier and work out a resolution that spells out the T’s & C’s for the purchase. 
3. Last in time to deliver the T’s & C’s does not mean first in right to have those T’s & C’s in control.

stock.adobe.com / Diki