Empire Machinery Co. v. Litton Business Telephone Systems

Facts

The plaintiff is the dealer for a tractor company in Arizona. In summer 1973, the plaintiff became interested in acquiring interconnect telephone systems, where the telephone customer owns switching equipment, rather than having the equipment be owned by the telephone company. The defendant manufactures and sells interconnect telephones, and it sent the plaintiff a card sharing the benefits of a Litton telephone system and asking the plaintiff to return an enclosed card if interested in buying from the defendant. The plaintiff returned the card and the defendant made contact with the plaintiff, during which the defendant explained that a new “Superplex” telephone system was being developed and would be available in approximately a year. The plaintiff expressed interested in this new system, and the parties began negotiating a deal. Ultimately, the defendant submitted a letter to the plaintiff  on July 30, 1973, that called for the installation of the older system system model which would eventually be replaced at a later date and at no extra cost by the Superplex system. The plaintiff agreed to this deal and signed an Equipment Sales Agreement, which was contingent upon the defendant signing and executing the agreement in its home office. The defendant did not sign that portion of the agreement. The plaintiff then purchased $12,000 worth of electrical equipment in anticipation of the telephone equipment that never shipped. The defendant then encountered issues with the Superplex system and tendered back the plaintiff’s payment.