Attorneys Fees: Course of Dealing Creates Right to Attorneys Fees

Plaintiff gave Defendants a price quote on a number of fire hydrants, to which Defendants responded by sending Plaintiff a purchase order for the hydrants. Plaintiff began shipping the fire hydrants and also sent invoices which stated that "[a]ll attorneys' fees and other costs of collecting this invoice will be paid by the buyer." After a dispute arose regarding the fire hydrants, Plaintiff filed suit and won a judgment for $48,000 (reduced to $25,000 after set-off for a counterclaim), following which it sought attorney fees of $18,485. Plaintiff contended that the purchase order submitted by Defendants was an offer, which was accepted by the issuance of the invoice, and that thus the attorney fee provision contained in the invoice became part of the contract. Defendants contended that Plaintiff's price quote was the offer and Defendants accepted the offer by submitting the purchase order; since neither document contained the attorney fee provision, Defendants contended that that provision did not become part of their contract. The District Court held that Plaintiff's price quote was the offer because it reflected an intent to be bound. The Court further held that Defendants accepted the offer when they sent the purchase order. Even though the invoice containing the attorney fee provision was sent later, the Court held that it became part of the contract. The Court reasoned that the parties had previously entered into similar contracts using the same invoices, which reflected a course of dealing between the parties.

Underground Pipe & Valve Inc. v. Siteworks Construction Co., et al., Civ. No. 96-CV-75242-DT, E.D. Mich., 02/13/98, Hood, J.
This article was prepared by Mark A. Goldsmith, a partner in our Litigation Department, was appeared in the July, 1998 edition of the Michigan Bar Journal.