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The full case caption appears at the end of this opinion. OPINION NIEMEYER, Circuit Judge: Based on its efforts to purchase 1,400 calculators from Sharp Electronics Corporation, Audio Visual Associates, Inc., filed this actionagainst Sharp for breach of contract, tortious business conduct, andviolation of the antitrust laws. On Sharp’s motion to dismiss filedunder Federal Rule of Civil Procedure 12(b)(6), the district court dismissed Audio Visual’s amended complaint. We affirm. I The allegations of Audio Visual’s amended complaint, which atthis stage of the proceedings we take to be true even though the allegations relate a somewhat incoherent series of events, state that AudioVisual contacted Sharp with the intent to purchase a number of Sharpbrand, graphing calculators (Model EL-9200C). Audio Visualplanned to resell the calculators to Corporate Systems Resources, Inc.(“CSR”), a “socially and economically disadvantaged small businessconcern” under � 8(a) of the Small Business Act, 15 U.S.C. � 637(a),which had received an award from the United States Navy to supplythe Navy with 1,400 calculators. Sharp, which was aware of AudioVisual’s arrangement with CSR and CSR’s award from the Navy,quoted Audio Visual a price of $62.99 per calculator. Based on thisquotation, Audio Visual contracted with CSR to provide it with the1,400 calculators for $71.00 each, and CSR contracted to provide theNavy with the calculators at a sum not alleged in the complaint. Twodays later, on January 25, 1995, Sharp orally informed Audio Visualthat it had decided to “dump” the EL-9200C calculators and “quoteda price of $31.00 per unit.” Pursuant to a “typical long-standing business practice” with Sharp, Audio Visual thereupon faxed Sharp a purchase order for 1,400 calculators at $31.00 per unit. The purchase order included the following language: PLEASE ADVISE OUR COST IF CASH IS PROVIDED WITH ORDER * * * * * DO NOT RELEASE ORDER BEFORE YOU [HAVE]RECEIVED WRITTEN OR VERBAL AUTHORIZATION FROM GARY LUNSFORD OR BOB DVORAK The purchase order was signed by Bob Dvorak as Audio Visual’s executive vice president and owner. On the same day that Audio Visual faxed Sharp the purchase order,a Sharp employee called Audio Visual demanding “to know the identity of the customer buying the calculators [and] asking whether it[was] the Navy and whether [Audio Visual] was acting as a brokerfor an ‘underprivileged firm.’” Sharp then advised Audio Visual thatit “was not going to obtain the order at any price.” When AudioVisual contacted another employee at Sharp to inquire about the status of its order, the employee stated that the calculators were “soldout.” The complaint alleges that at that time Sharp actually had “atleast 30,145 units then in stock.” During this same period, Audio Visual alleges, Sharp approachedthe Navy directly and offered to provide it with the calculators, alongwith some projectors, if the Navy would cancel its contract with CSR.Audio Visual alleges that the Navy did cancel the CSR contract andthat this caused CSR to cancel its contract with Audio Visual. WhenAudio Visual called Sharp again, Sharp again stated that the calculators were sold out and that, in any event, it would not ship AudioVisual the calculators. Less than two weeks later, Sharp informed Audio Visual that itsEL-9200C calculators were now available at $31.00 each. Accordingly, Audio Visual faxed Sharp a purchase order for 1,400 calculators at this price. When Audio Visual followed up with a telephonecall, however, Sharp stated that the calculators were sold out and thatAudio Visual’s order would not be filled. But Sharp referred AudioVisual to the Douglas Stewart Company (“DSC”) in Wisconsin, oneof Sharp’s distributors. When Audio Visual called DSC, DSC quoted a price of $29.95 percalculator. Shortly after providing this quotation, however, DSC toldAudio Visual that the calculators had a new price of $31.00 because”Sharp says $31.00 is the fixed price.” Ultimately, Audio Visual completed a transaction with DSC and purchased 1,400 calculators at theprice of $31.00 each. Audio Visual then sold the calculators to CSR,which in turn provided them to the Navy. Audio Visual filed this action against Sharp and DSC, alleging(1) breach of a contract to sell Audio Visual calculators at $31.00each, (2) intentional interference with existing contractual relationsbetween Audio Visual and CSR, (3) intentional interference withprospective economic advantage and business relations, (4) fraud andmisrepresentation, (5) negligent misrepresentation, and (6) price fixing. Audio Visual sought $100,000 in compensatory damages, trebledamages on the antitrust claim, $3 million in punitive damages, andattorneys fees. On the defendants’ motion to dismiss made under Federal Rule ofCivil Procedure 12(b)(6), the district court dismissed the complaint.It concluded that Audio Visual’s faxed purchase order was at most anoffer that was rejected by Sharp and that no contract between Sharpand Audio Visual for the sale of calculators ever came into existence. On the intentional interference claims, the court concluded thatbecause the alleged interference involved a contractual relationshipbetween Sharp, Audio Visual, CSR, and the Navy,”effectively whatyou’ve got is, one of the parties to the contract alleging interferencewith the contract by another party to the contract, to the overall contract, which essentially you cannot do.” With respect to the fraudulentand negligent misrepresentations, the court concluded that the statement by Sharp that it was sold out was not a representation uponwhich Audio Visual could have reasonably relied. The court concluded that the statement was simply a refusal to deal, which is notactionable. Finally, the court dismissed the price-fixing claim becausethere was no indication of agreement or concerted action betweenSharp and DSC. Because Audio Visual settled its claims against DSC, it filed thisappeal only with respect to the district court’s order dismissing itscomplaint against Sharp. II For its principal argument on appeal, Audio Visual contends thatit adequately alleged the formation of a contractual relationshipbetween it and Sharp under which Sharp agreed to sell Audio Visual1,400 calculators at $31.00 each and that Sharp illegally refused tohonor the contract. Audio Visual points to its allegations that Sharp”quoted a price of $31.00 per unit” and that”pursuant to typical longstanding business practice, it faxed a purchase order to Sharp,” a copyof which it attached to the complaint. As Audio Visual characterizesthis exchange in its complaint, “[Audio Visual] accepted an offer ofSharp to provide the calculators at a specified price. A complete contract between the parties was created.” Sharp contends that Audio Visual’s purchase order amounted to”nothing more than an offer requiring acceptance of its terms to createa contract” and that Sharp was fully within its rights to reject the purchase order. It argues that if we were to rule otherwise, purchaserswould be able “to create legally enforceable contracts simply by sending or faxing a purchase order to the seller.” Moreover, Sharp notes,if sending a purchase order were held to create a contract, then a sellerwould never be able to reject an order or refuse to deal.The commercial exchange between Audio Visual and Sharp wasnot unusual as far as it went, and the significance of each exchangeis readily defined either by common law or the Uniform CommercialCode. Daily, sellers provide quotations on prices and delivery, anddaily, buyers place purchase orders to acquire goods pursuant to thesequotations. Often, the terms of proposed transactions are modified byoral or written communications and transactions are finalized simplyby performance and payment in accordance with the latest proposals. This facility and flexibility in commercial transactions involving thesale of goods is specifically contemplated by the Uniform Commercial Code. See Md. Code Ann., Com. Law � 1-102(2). [FOOTNOTE 1] Under the Code, buyers and sellers may freely exchange purchaseorders, faxes, and telephone calls relating to a proposed transactionwithout incurring contractual obligations unless and until the essentialrequirement for contract formation is satisfied– i.e. that there be anobjective manifestation of mutual assent by the parties (sometimesreferred to as a “meeting of the minds”). See Maryland SupremeCorp. v. Blake Co., 369 A.2d 1017, 1023 (Md. 1977); World Ins. Co.v. Perry, 124 A.2d 259, 267 (Md. 1956); Restatement (Second) ofContracts � 17(1) (“the formation of a contract requires a bargain inwhich there is a manifestation of mutual assent to the exchange anda consideration”). The manifestation of mutual assent ordinarily takesthe form of an offer by one party followed by an acceptance by theother party. See Blake, 369 A.2d at 1025. In determining whether aproposal by one party amounts to an offer, we must ask whether it canbe accepted to create an enforceable arrangement. See Restatement(Second) of Contracts � 24 (“An offer is the manifestation of willingness to enter into a bargain, so made as to justify another person inunderstanding that his assent to that bargain is invited and will conclude it”). In this case, Sharp quoted a price of $31.00 per unit, a quotationthat Audio Visual claims it “accepted” to form a binding contract.This argument, however, does not withstand closer scrutiny. AudioVisual cannot maintain that upon its receipt of a price quotation fromSharp, it could have formed a binding contract to purchase, for example, 1.5 million units — a proposition yet more untenable if it turnedout that Sharp were unable to deliver 1.5 million units. Price quotations are a daily part of commerce by which products are shopped andcommercial transactions initiated. Without more, they amount to aninvitation to enter into negotiations, but generally they are not offersthat can be accepted to form binding contracts. See Blake, 369 A.2dat 1024; see also Dyno Constr. Co. v. McWane, Inc., 198 F.3d 567,572 (6th Cir. 1999) (noting that a price quotation is usually considered an invitation for an offer); Interstate Indus., Inc. v. BarclayIndus., Inc., 540 F.2d 868, 870-73 (7th Cir. 1976) (discussing distinctions between a price quotation and an offer). It would bring an endto the competitive practice of shopping products if every quotationexposed the “quoter” to an enforceable contract on whatever terms the”quotee” chose, regardless of product availability. Typically, a seller’s price quotation is an invitation for an offer,and the offer usually takes the form of a purchase order, providingproduct choice, quantity, price, and terms of delivery. The UniformCommercial Code provides that the seller can accept such an offer inany of several ways, often determined by custom and practice. SeeMd. Code Ann., Com. Law �� 2-204(1), 2-206(1), 2-208. Frequently,the seller accepts the offer of a purchase order by a written acknowledgment, which also provides a shipping date for the product. Theseller may also accept simply by performance and delivery of thegoods. A seller, however, must also be free to reject the terms of thepurchase order and to propose alternative terms. In this case, Sharpdid reject Audio Visual’s purchase order, stating explicitly that itwould not fill the order. Audio Visual has not alleged the existenceof any evidence that would suggest otherwise. While Audio Visual alleges that custom and practice governed itspurchases from Sharp, this allegation does not indicate that it wasSharp’s practice to treat Audio Visual’s purchase orders as binding onSharp. And logic would dictate otherwise. Just because Sharp quotesa price, it cannot be said to have agreed to other essential terms thata purchaser might propose in its purchase order with respect to quantity, delivery, and payment. The most that the custom and practice asalleged in this case could suggest is that when Sharp filled AudioVisual’s purchase orders, it thereby signaled its acceptance of thoseorders. But in the specific transaction before us, it is yet more apparent thata contract was never formed. Audio Visual’s purchase order in thisinstance was conditional, and it did not amount to an offer that could,without satisfaction of the condition by Audio Visual, be accepted bySharp. Audio Visual’s purchase order was conditioned on receiptfrom it of “written or verbal authorization from Gary Lunsford or BobDvorak.” Until such authorization was received, Sharp could not bindAudio Visual to the order submitted. Despite Audio Visual’s inability to demonstrate a meeting of theminds with Sharp on the essential terms of a transaction, AudioVisual contends, in conclusory terms, that its purchase order becamethe basis of a contract “pursuant to typical long-standing businesspractice,” as recognized by the Uniform Commercial Code. It pointsfirst to � 2-207(3), which provides that “[c]onduct by both partieswhich recognizes the existence of a contract is sufficient to establisha contract for sale although the writings of the parties do not otherwise establish a contract.” But this section”contemplates contract formation through performance.” Avedon Engineering, Inc. v. Seatex,126 F.3d 1279, 1284 n.10 (10th Cir. 1997) (quoting 1 White & Summers, Uniform Commercial Code � 1-3, at 25-26 (4th ed. 1995)).Here, the complaint does not allege that Sharp performed pursuant tothe purchase order — it did not ship the goods to Audio Visual — andAudio Visual alleges no other conduct by either party to evidence acontract. Audio Visual also points to � 2-204(1), which allows that a “contract for the sale of goods may be made in any manner sufficient toshow agreement, including conduct by both parties which recognizesthe existence of such a contract.” This provision, however, is nothelpful to Audio Visual because again it has failed to allege “conduct”by Sharp that “recognizes the existence” of an agreement. Finally, Audio Visual points to � 1-205(3), which provides that “[a]course of dealing between parties . . . give[s] particular meaning toand supplement[s] or qualif[ies] terms of an agreement.” This section,however, does not suggest that a course of dealing may in and of itselfprovide the basis for a contract. Rather, it supplies a mode of interpretation for construing existing contracts. See, e.g., Snyder v. HerbertGreenbaum & Assocs., Inc., 380 A.2d 618, 622 (Md. 1977) (“‘courseof dealing’ is an interpretative device to give meaning to the wordsand terms of an agreement”). In short, Audio Visual does not allege,either by course of conduct or otherwise, that it and Sharp mutuallyassented to a transaction for the purchase and sale of 1,400 calculatorsat $31.00 per calculator. In addition to its failure to allege any manifestation of mutualassent, Audio Visual’s complaint also demonstrates on its face thatany alleged contract would be unenforceable because it did not satisfythe Uniform Commercial Code’s statute of frauds. Section 2-201(1)provides: Except as otherwise provided in this section, a contract forthe sale of goods for the price of $500 or more is notenforceable by way of action or defense unless there is somewriting sufficient to indicate that a contract for sale has beenmade between the parties and signed by the party againstwhom enforcement is sought. Undisputedly, Sharp did not sign any document agreeing to sell calculators at $31.00 each (for a total of $43,400) and did not return anywriting to Audio Visual acknowledging or purporting to accept, evenin an imperfect manner, Audio Visual’s purchase order. Yet AudioVisual argues that its claim falls within the exception to the statute offrauds included in � 2-201(2), which provides: Between merchants if within a reasonable time a writing inconfirmation of the contract and sufficient against the senderis received and the party receiving it has reason to know itscontents, it satisfies the requirements of subsection (1) against such party unless written notice of objection toits contents is given within ten days after it is received. Audio Visual maintains that its purchase order was in fact the “writing in confirmation” of a preexisting contract referred to in � 2-201(2). However, Audio Visual never alleges that it had, before transmission of the purchase order, accepted Sharp’s price quotation. Section 2-201(2) only refers to a writing “in confirmation of thecontract.” (Emphasis added). Accordingly, for this provision toexcuse compliance with the statute of frauds, Audio Visual wouldhave to allege that a contract existed and that it sent the purchaseorder in confirmation of the contract within a reasonable time thereafter. See, e.g., R.S. Bennett & Co. v. Economy Mechanical Indus., Inc.,606 F.2d 182, 185-86 (7th Cir. 1979). In sending its purchase orderin this case, however, Audio Visual sought to form a contract, ratherthan confirm one. In sum, the complaint alleges a price quotation by Sharp and AudioVisual’s responsive issuance of a purchase order for 1,400 units at thequoted price, but it alleges no mutual assent to any commercial transaction and no writing signed by Sharp to satisfy the statute of frauds.Therefore, Audio Visual’s complaint fails to allege a contract onwhich to base a breach-of-contract claim. III Audio Visual’s tort allegations were also properly dismissed.Audio Visual alleged in its complaint that Sharp interfered with itscontractual relationship and prospective economic advantage inbypassing Audio Visual and CSR and contacting the Navy directly tosell it the calculators. Audio Visual also alleged that Sharp fraudulently and negligently misrepresented first that it had calculators tosell at $31.00 and then that it was out of stock when in fact it had aninventory of more than 30,000 calculators. To support its claim of intentional interference with an existingcontract, Audio Visual must allege, inter alia , “[t]he existence of acontract or a legally protected interest between the plaintiff and athird party” and “the defendant’s intentional inducement of the thirdparty to breach or otherwise render impossible the performance of thecontract.” Bagwell v. Peninsula Regional Medical Ctr., 665 A.2d 297,313 (Md. Ct. Spec. App. 1995). But Audio Visual does not allege thatSharp induced CSR to breach its contract with Audio Visual. Rather,it alleges that Sharp contacted the Navy directly, thereby allegedlyinterfering with the contract between the Navy and CSR. BecauseAudio Visual was not a party to this contract, Audio Visual fails toallege that Sharp induced a party with which Audio Visual had a contract to “breach or otherwise render impossible the performance ofthe contract.” Id. Moreover, Audio Visual also does not claim that theNavy and CSR entered into a contract with the intent to benefit AudioVisual, such that Audio Visual had a “legally protected interest” as athird-party beneficiary. See Flaherty v. Weinberg, 492 A.2d 618, 622(Md. 1985). To state a claim of tortious interference with its prospective economic advantage, Audio Visual must allege: (1) intentional and wilful acts; (2) calculated to cause damage to the plaintiffs in their lawful business; (3) done withthe unlawful purpose to cause such damage and loss, without right or justifiable cause on the part of the defendants(which constitutes malice); and (4) actual damage and lossresulting. Alexander & Alexander, Inc. v. B. Dixon Evander & Assocs., Inc.,650 A.2d 260, 269 (Md. 1994) (citation omitted). Audio Visual,though, never alleges the necessary “unlawful purpose” of Sharp. Theonly allegations touching on this element are Sharp’s knowledge ofCSR’s contract with the Navy and Audio Visual’s contract with CSR,Sharp’s statements that Audio Visual would not get the calculators “atany price,” Sharp’s false claim that it had no calculators, and Sharp’soffer to provide the Navy with calculators and projectors. These allegations, without more, do not support a necessary claim of “violenceor intimidation, defamation, injurious falsehood or other fraud, violation of the criminal law, and the institution or threat of groundlesscivil suits or criminal prosecutions in bad faith.” K & K Management,Inc. v. Lee, 557 A.2d 965, 979 (Md. 1989) (citation omitted). Finally, to support its claim of fraudulent misrepresentation basedon Sharp’s false offer to sell the calculators for $31.00 each and itslater false statement that the calculators were sold out, Audio Visualmust allege that it justifiably relied on the misrepresentations and, asa result, suffered compensable damages. See Alleco, Inc. v. Harry &Jeanette Weinberg Found., Inc., 665 A.2d 1038, 1047 (Md. 1995).Similarly, to support its negligent misrepresentation claim, AudioVisual must allege that it had justifiably taken action in reliance onthe statements and suffered damages proximately caused by Sharp’snegligence. See Martens Chevrolet, Inc. v. Seney , 439 A.2d 534, 539(Md. 1982). But Audio Visual has failed to allege its appropriate reliance on the statements. Because Audio Visual was able to obtain thecalculators at a per-calculator price of $31.00 from DSC and therebyto fill CSR’s order, Sharp’s refusal to sell the calculators also causedno damage. Although Audio Visual states that it lost its business relationship with CSR, there is no indication that Audio Visual’s loss ofthat relationship is attributable to its reliance on Sharp’s statements. IV Finally, Audio Visual alleges that it was damaged in its businessor property by Sharp’s price fixing, in violation of� 1 of the ShermanAct, 15 U.S.C. � 1, and � 4 of the Clayton Act, 15 U.S.C. � 15. Itbases this claim on its allegations that, although DSC originallyquoted Audio Visual a price of $29.95 per calculator, an hour later,DSC informed Audio Visual that the price per calculator was $31.00because “Sharp says $31.00 is the fixed price.” But, as the districtcourt observed, there is no allegation that the $31.00 price was theproduct of an illegal contract, combination, or conspiracy. The complaint only states, “based upon Sharp’s intervention with the DSC theprice was changed to $31.00 per unit.” These allegations are insufficient to allege an illegal price-fixing arrangement. See Monsanto Co.v. Spray-Rite Serv. Corp., 465 U.S. 752, 764 n.9 (1984) (“The conceptof ‘a meeting of the minds’ or ‘a common scheme’ in a distributor-termination case includes more than a showing that the distributorconformed to the suggested price. It means as well that evidence mustbe presented both that the distributor communicated its acquiescenceor agreement, and that this was sought by the manufacturer”); UnitedStates v. Colgate & Co., 250 U.S. 300, 307 (1919) (the Sherman Actdoes not restrict a manufacturer’s right to “announce in advance thecircumstances under which he will refuse to sell”). For the reasons given, we affirm the judgment of the district courtdismissing Audio Visual’s amended complaint. AFFIRMED :::FOOTNOTES::: FN1 Section 1-102(2) provides that the purposes of the Uniform Commercial Code are: (a) To simplify, clarify and modernize the law governing commercial transactions; (b) To permit the continued expansion of commercial practicesthrough custom, usage and agreement of the parties; (c) To make uniform the law among the various jurisdictions.
Audio Visual Associates v. Sharp Electronics Corp. UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT AUDIO VISUAL ASSOCIATES, INCORPORATED, t/a Ritz Audio Visual Associates, Incorporated, Plaintiff-Appellant, v. SHARP ELECTRONICS CORPORATION, Defendant-Appellee. and DOUGLAS STEWART COMPANY, Defendant. No. 98-2113 Appeal from the United States District Court for the District of Maryland, at Greenbelt. Peter J. Messitte, District Judge. (CA-97-3816-PJM) Argued: February 29, 2000 Decided: April 20, 2000 Before NIEMEYER, MICHAEL, and TRAXLER, Circuit Judges. Affirmed by published opinion. Judge Niemeyer wrote the opinion,in which Judge Michael and Judge Traxler joined. COUNSEL ARGUED: Sylvia Jiva Rolinski, Silver Spring, Maryland, for Appellant. Brett Ingerman, PIPER & MARBURY, L.L.P., Baltimore, Maryland, for Appellee. ON BRIEF: Henry R. Lord, Anthony L. Meagher, PIPER & MARBURY, L.L.P., Baltimore, Maryland, for Appellee.
 
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