Problem.Dispute.World Cup soccer balls
In preparation for the 1999 Women's World Cup, held in the
United States, the United States World Cup Organizing Committee ("Committee")
contacted Nike about purchasing 50,000 soccer balls, to be marked with a special
commemorative logo and distributed free to the first 50,000 fans attending the
championship final game of the World Cup.
Nike offered to provide the balls with the commemorative logo at
$8.00/ball. The Committee asked Nike for time to consider the offer. Nike responded with
the following e-mail: "Our $8.00 offer subject to terms stated at our website:
www.nike.com. Yours sincerely, Mina Hammster, Sales Representative." The
website included the following information: "All prices quoted for custom orders are
guaranteed for 6 months from the date of quotation."
Two months after Nike's offer, the Committee telephoned Nike for
the purpose of ordering 50,000 balls with the commemorative logo @ $8.00/ball.
During the telephone conversation, Nike told the Committee that it would have to
charge $9.00/ball because of increased labor costs (responding to public criticism of low
wages for workers in foreign countries). The Committee objected to the increased price,
but ended up sending a written, signed order for 50,000 balls, "as previously
priced." The order specified the logo: "Women's World Cup 99."
Nike timely delivered the balls together with an invoice for
$450,000. The Committee sent Nike a check for $400,000 together with a note
explaining that it was holding Nike to the originally quoted price of $8.00/ball.
Part A:
Is Nike entitled to the additional $50,000? See UCC 2-205, 1-201(39), (46), Electronic Signatures in Global and National Commerce Act 101(a).
In response to the note from the Committee about only paying
$8.00/ball, Nike agreed to settle the dispute by accepting payment of $25,000 from
the Committee at the end of the World Cup (9 months later).
Subsequent to the settlement agreement, the Committee discovered
that the commemorative logo on the balls contained an error: the logo read "Woman's
Cup 99" instead of "Women's World Cup 99." It was too late, however,
to order new balls from Nike or anyone else. Thus, the Committee decided to use the balls
anyway, but wrote a letter to Nike saying that it was "withholding payment of the
$25,000 until advised of our rights or liabilities by legal counsel."
The Committee seeks your advice. What are the Committee's rights
against or liabilities to Nike?