Problem.Dispute.World Cup soccer balls
In preparation for the 2003 Women's World Cup, held in the
United States, the United States World Cup Organizing Committee ("Committee")
contacted Nike about purchasing 25,000 soccer balls, to be marked with a special
commemorative logo and distributed free to the first 25,000 fans attending the
championship final 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 web site:
www.nike.com. Yours sincerely, Mina Hammster, Sales Representative." The web
site 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 25,000 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, and the
next day sent Nike a written, signed order for 25,000 balls, "as previously
priced." The order specified the logo: "Women's World Cup 03."
Nike timely delivered the balls together with an invoice for
$225,000. The Committee stored the boxes of soccer balls in a warehouse without
opening any of the boxes to inspect the balls. The Committee sent Nike a check for
$200,000 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 $25,000? First review Problem.Dispute.Duration of offers. Then consult U.C.C 2-205, 1-201(39), (46). Also consult Commentary.Electronic communication, the Electronic Signatures in Global and National Commerce Act §101(a) and amended U.C.C 2-108, 2-211.
In response to the note from the Committee about only paying
$8.00/ball, Nike agreed to settle the dispute by accepting payment of $10,000 from
the Committee at the end of the World Cup (9 months later).
Just prior to the World Cup, the Committee opened the boxes of
soccer balls and discovered that the commemorative logo on the balls contained an error:
the logo read "Woman's Cup 03" instead of "Women's World Cup 03."
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 $10,000 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?