Question

On May 2, Handy Hardware sent Ram Industries a signed purchase order that stated, in part, as follows: "Ship for May 8 delivery 300 Model A-X socket sets at current dealer price. Terms 2/10/net 30." Ram received Handy's purchase order on May 4. On May 5, Ram discovered that it had only 200 Model A-X socket sets and 100 Model W-Z socket sets in stock. Ram shipped the Model A-X and Model W-Z sets to Handy without any explanation concerning the shipment. The socket sets were received by Handy on May 8. Which of the following statements concerning the shipment is true?

A. Ram's shipment is an acceptance of Handy's offer.
B. Handy's order must be accepted by Ram in writing before Ram ships the socket sets.
C. Handy's order can be accepted only by Ram's shipping conforming goods.
D. Ram's shipment is a counteroffer.

Answer 1

Ram's shipment is likely an acceptance of Handy's offer because the shipment of non-conforming goods without accommodation notice typically constitutes acceptance and breach under the UCC.

Step-by-step explanation:

The student's question concerns whether Ram Industries' actions constituted an acceptance or a counteroffer to Handy Hardware's purchase order. According to the Uniform Commercial Code (UCC), which governs transactions of goods, the shipment of non-conforming goods (goods that do not meet the buyer's specifications) does typically constitute both an acceptance of the contract and a breach of that contract. However, if the seller includes a notice to the buyer that the non-conforming goods are intended as an accommodation, the shipment is considered a counteroffer rather than an acceptance. In this scenario, Ram shipped 200 Model A-X socket sets (conforming goods) and 100 Model W-Z socket sets (non-conforming goods) without any explanation. Without further information or a clear indication that the shipment was intended as an accommodation, the shipment may be seen as an acceptance and breach. Thus, the most accurate statement is that Ram's shipment is an acceptance of Handy's offer.