Bethlehem Steel Corp. v. Litton Industries, Inc. case brief

Bethlehem Steel Corp. v. Litton Industries, Inc.: (646) Sup. Ct. Pennsylvania (1983)

• Facts: Bethlehem had previously bought 1 ship from Litton. Litton extended offer for option contract to buy 5 more ships on April 25, 1968 which would be firm and irrevocable until December 31, 1968. Agreement was for a right for Bethlehem to buy up to 5 boats in a 5 yr period with the specifications for the boat being the same as the original with the price to be similar to what is listed in the letter, but to be adjusted by inflation, and with the details to be filled in by mutual agreement. Bethlehem tried to exercise option to buy 2 vessels in November 1973 and 1 more in December 1973. Litton refused to build the ships. Bethlehem wants damages of $95M, claims breach of contract – theory for damages is difference between contract price and what it will cost us to get the boats from someone else. Bethlehem says – April 25 letter constituted an offer for a contract, they accepted it on December 31 (which was within the period of time specified in the offer). Litton’s legal argument – since in the agreement letter they left open many gaps, it was so indefinite that it was not a contract – the offer was too indefinite – it wasn’t really an offer. UCC applies – ships are goods.
• Issue: Was there a contract, was their an offer?
• Holding: Too indefinite to be held to be enforceable firm offer and their may not have been an agreement to such an offer.