D called P to place a phone order for rubber. P sent D a letter to confirm the transaction. P then sent D a contract stating the terms of the order.
D sent P a letter asking P to deliver the goods at once. The letter said that the acceptance of the order had to be promptly acknowledged.
Later, D sent a letter to P saying that they did not want the rubber. P sued D.
Procedural History:
Lower court found for P, contract valid.
NY COA reversed, found for D, no contract formed.
Issues:
Is a contract formed if the terms of acceptance do not directly mirror the terms of the offer?
Holding/Rule:
A contract is not formed if the terms of acceptance do not directly mirror the terms of the offer.
Reasoning:
When an acceptance sets out different terms than those stated in the offer, the acceptance becomes a counter-offer.
P did not acknowledge the receipt of the order, so the proposal remained unaccepted.
Only two courses were open to the D; it could accept or it could reject.
A proposal to accept the offer it modified or an acceptance subject to other terms and conditions was equivalent to an absolute rejection of the offer made by P.
Dissent:
None given.
Notes:
There is much more flexibility in these cases now; see the UCC.
This was not necessarily a good result; the mirror image rule has inherent problems.
