Legal Updates

An approved price quote will be deemed a binding agreement even if does not include all details of the transaction

November 16, 2015
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A carpentry issued a price quote to a customer and the customer's office manager approved the proposal. Later, the customer denied the deal, arguing, inter alia, that the office manager was not an authorized signatory.

The Court held that a binding contract will be created upon existence of an intentions to be bound by contract and specificity. The price quote was issued after meetings with the customer and included enough details of the work to be done. The fact that the terms of payment and delivery dates were not specified in the quote does not prevent it from creating a binding agreement.

The existentially of intention to be bound one examines whether the actions and behavior of the parties cause a reasonable person to conclude that they felt determined to create a binding agreement. In this case the specificity of the quote and the fact that the quote was sent by the office manager back with the writing "approved" show intent to be bound. The lack of signatory rights to the office manager do not prevent binding of the company because the Court held that a signatory of the company instructed her to approve.

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