Empire Machinery Co. v. Litton Business Telephone Systems
Arizona Court of Appeals
566 P.2d 1044 (1977)
Empire's (plaintiff's) signed Equipment Sales Agreement for a Litton (defendant) phone system stated it would only become binding once Litton's home office approved and executed it, and no one at Litton ever signed it, but Litton's own president wrote to the phone company describing a "contractual relationship" with Empire, Litton retained Empire's roughly $8,500 deposit, Litton's service manager later requested new phone service for Empire, and Litton instructed Empire to purchase around $12,000 in supporting electrical equipment — after which Litton never shipped or installed the system, and the trial court granted Litton summary judgment finding no binding contract formed.
Whether, if an offeree with authority to legally bind its organization takes steps to begin performance of its contractual obligations that would lead a reasonable offeror to believe that the contract has been accepted, such conduct may constitute acceptance of the contract.