Allied Steel and Conveyors, Inc. v. Ford Motor Co. (1960)

Procedural History

– In favor of Ford motor co. in lower court.
– Affirmed in appeals court.
– Judgment for Hankins (3618) and judgment for Ford for impleading of Allied.
– Allied appealed.


– Allied Steel provided steel for Ford Motor Co.
– Indemnity agreement – a party undertakes contingent liability for a loss threatening another.
– July 19, 1955 – Ford ordered steel from Allied Ford stated that (order 15145) allied would be responsible for all damages caused by negligence of its own employees.
– Order (3618) stated that Allied would be responsible not only for the negligence of its own employees, but also for negligence of Fords employees in connection with Allied’s work (marked void).
– July 26th, to allied amendment #2 stating
o This purchase order agreement is not binding until accepted. Acceptance should be executed on acknowledgment copy should be returned to buyer….identical, and was NOT marked void for second contingency…
o Acknowledged by Allied on Nov. 10th, and reached Ford on Nov. 12th.
– On September 15th, Hankins (employee of Allied) sustained personal injuries as a result of negligence of Ford’s employees in connection with Allied’s work.
o Hankins brought suit against Ford, and Ford impleaded Allied to be responsible due to their agreement from provision of 3618.
 Allied’s defense
o Amendment #2 were not in effect at the time of Hankin’s injury because it had not been accepted at that time by Allied in the formal manner expressly required by the amendment itself….

 It argues that a binding acceptance of the amendment could be effected ONLY by Allied’s execution of the acknowledgment copy of the amendment and its return to Ford.

 Essentially, it can’t be in effect because it happened AFTER the amendment was agreed upon.
 Argues that Ford could have revoked the order when Allied began installing the machinery first having not executed its written agreement.
• Appeals court states that ford could not have done so.


– Did Ford make an exclusive manner of acceptance? If there is a present, and exclusive offer, it does not bind the offeror in the absence of a meeting of the minds on the altered acceptance.


– No.


– If an offeror merely suggests a permitted method of acceptance, other methods of acceptance are not precluded….If the offer requests a return promise and the offeree without making the promise actually does or tenders what was requested to promise to do, there is a contract if such performance is completed or tendered within the time allowable for accepting by making a promise.
*** It is well settled that acceptance of an offer by part performance in accordance with the terms of the offer is sufficient to complete the contract***
 Look at circumstances and context of this case. Allied was already proceeding as they promised.


1. Execution and return of acknowledgment copy of Amendment No. 2 was merely suggested method of acceptance and did not preclude acceptance by some other method.
2. That offer was accepted and a binding contract affected when Allied, with Ford’s knowledge, consent and acquiescence, undertook performance of the work called for by the amendment.
 It would not be binding until accepted by Allied – was not exclusive language for acceptance, but was to provide a simple and convenient method by which assent.
 The signing and return of the acknowledgment copy was before undertaking the work itself cannot be regarded as an essential condition to completion of a binding contract.
 Implied actions from the parties. Done on faith and good order…the offeree unjustifiably led the offeror to believe that the contract was legit, cannot say otherwise just because he/she says so.
 Contracts are based upon what people do, not what they say they do.
 Acknowledge acceptance by performance of duty with ford.
 Implied condition of the offeree’s duty to perform under the contract that is formed by the acceptance.


– Lower court affirmed


– Restatement 62
o Effect of performance by offeree where offer invites either performance or promise.
1. Where an offer invites an offeree to choose between acceptance by promise and acceptance by performance, the tender or beginning of the invited performance or a tender of a beginning of it is an acceptance by performance.
2. Such an acceptance operates as a promise to render complete performance.

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