Graulich Caterer Inc. v. Hans Holterbosch, Inc.

Hans Holterbosch, Inc. (defendant) ran a German beer pavilion at the 1964 New York World’s Fair. Holterbosch negotiated with Graulich Caterer Inc. (defendant) to prepare German food to serve with the beer. Graulich planned to deliver frozen platters to reheat and cook through using microwaves, a relatively new method. After Holterbosch approved samples, Graulich submitted a letter of intent, or interim agreement, detailing the price, delivery, quantity, and quality terms. Holterbosch added a rider stating the letter showed intent only because the parties intended to enter a formal contract later and noted acceptance was conditioned on the food matching the samples’ quality. Graulich made extensive preparations and investments to deliver the first batch, but Holterbosch rejected it as bland and having unusual consistency. Graulich delivered a second batch two days later, but Holterbosch again rejected the quality and claimed Graulich made no attempt to cure it. Holterbosch told Graulich it was canceling and switched to preparing food itself on pot burners at the pavilion. Graulich sued for breach of contract in New Jersey, which had just adopted the Uniform Commercial Code (UCC). But the trial court applied the common-law mirror-image rule to the letter of intent and found no contractual relationship because the rider changed the letter’s terms. Graulich appealed.