Konic International Corporation v. Spokane Computer Services, Inc.

David Young, an employee of Spokane Computer Services, Inc. (Spokane) (defendant) was instructed by his superior to purchase a surge protector for his company. Young inquired about the price of surge protectors manufactured by Konic International Corporation (Konic), and was informed the price was “fifty-six twenty.” The Konic salesman meant the price was $5,620.00, but Young understood it to be $56.20. Young prepared a purchase order for $56.20 and obtained approval for the purchase order from his superior. Young placed the order with Konic, and Konic shipped the surge protector to Spokane where it was installed and immediately used. Due to internal processing errors, the discrepancy in the price on Spokane’s purchase order and Konic’s invoice was not immediately noticed. The discrepancy was first noticed by Spokane’s president when he returned from vacation. Spokane’s president requested that Young verify the price with Konic, but Young failed to do so. As a result, the discrepancy in price went unnoticed by Spokane for another two weeks. Once Spokane’s president learned of the actual discrepancy in price, he telephoned Konic and told Konic that Young had no authority to order the surge protector, that Spokane did not want it, and that it should be removed. Konic responded that the surge protector was Spokane’s property now, and that if the balance owed on the price was not paid, Konic would sue Spokane. Spokane did not pay the balance, and Konic brought suit against Spokane. The suit was heard before an Idaho magistrate. The magistrate held Young had no actual or apparent authority to order the surge protector, and found Spokane not liable for the balance. The Idaho state court affirmed, and Konic appealed.