Corinthian Pharmaceutical Systems, Inc. v. Lederle Laboratories


– (D) Lederle – manufacturer and distributor that makes drugs (DTP vaccine is one of them)
– (P )- Corinthian Pharmaceutical- distributor of drugs that purchases supplies from manufacturers. One of them is the (D) largest order ever was 100 vials.
– (D) periodically issues price lists to its customers for all products.
 Subject to acceptance – prices are subject to change w/o notice.
 Changes in price take immediate effect….unfilled and back orders price effect at time shipment is made.
 1985-1986 product liability suits went up- self insured, cost of drugs went up as well.
 Price letter no. E-48 – price increase of vial from $51-171 on May 19th ’86, effective May 20th, ’86. (to sales reps).
– The (D) gained knowledge of the price increase statement on the 19th, and ordered 1000 vials on the 19th as to lock in the lower price.
 Voice animated system they called the order in at. (TELGO)
– (D) of the 1000 vials requested, just sent 50 at the $64.32 price and stated, with a letter that the remaining 950 would be the new, adjusted price.
– (P) – seeking the 950 vials for the lower price.
• Courts reasoning (offer)
o 1st offer – (P) wanting 1000 vials for $64.32.
o Price lists distributed were NOT offers – invitation for an offer…not binding.
o Internal price memo, was not an offer, or an invitation to make one.
• Courts reasoning (acceptance)
o Did the (D) accept offer by sending 50 vials? NO
o TELGO computer is not an acceptance.
o What is made of the 50 vials sent?…issue, non-conforming goods.

Procedural History

• – (D) moved for summary judgment.
• – U.S. district court, southern district, Indiana
• – Court used UCC codes for this case.


– Was (D’s) shipment of 50 vessels an acceptance of an offer made by (P) for 1000 vessels of the product? Or was it a mere accommodation?


– No.


– Thus, under the code a seller accepts the offer by shipping goods, whether they are conforming or not, but if the seller ships non-conforming goods AND seasonably notifies they buyer that the shipment is a mere accommodation, then the seller has not, in fact, accepted the buyer’s offer.


– Accommodation implies no consideration…just a favor or gift.
– (D) clearly stated the rules, regulations and prices…50 was a gift, and the next 950 would be at the higher price…gave an out-clause to the (P).
– Standard terms of (P’s) business practices acceptance of orders was conditioned on buyer’s acceptance of the seller’s terms.
– In favor of (D)


– Accommodation
o Is an arrangement or engagement made as a favor to another…implies NO CONDSIDERATION.

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