## Facts

- Ford issued a purchase order to Allied for machinery and related work at Ford’s facility, with terms stating that signing and returning an acknowledgment copy “shall constitute acceptance.”
- The initial purchase order included a broad indemnity form (Form 3618) but it was marked “VOID,” limiting Allied’s responsibility largely to harms caused by Allied’s own negligence.
- Ford later issued Amendment No. 2 for additional machinery and installation work to be performed by Allied; Amendment No. 2 attached Form 3618 without voiding it.
- Allied did not sign and return the acknowledgment copy for Amendment No. 2 before beginning the installation work on Ford’s premises.
- Ford knowingly permitted and acquiesced in Allied’s commencement and continuation of the work under Amendment No. 2.
- During performance under Amendment No. 2, an Allied employee was injured on Ford’s premises, allegedly due to the negligence of Ford’s employees.
- After the accident, Allied signed and returned the acknowledgment copy of Amendment No. 2.
- Ford incurred liability exposure in the employee’s suit and sought contractual indemnity from Allied under Form 3618 as incorporated into Amendment No. 2.

## Issues

1. Whether Amendment No. 2, including a clause requiring Allied to indemnify Ford for damages caused by Ford’s own negligence, was binding at the time of the injury despite Allied’s failure to sign and return the acknowledgment copy before the accident.
2. Whether beginning performance with the offeror’s knowledge and acquiescence can constitute acceptance of an offer that states acceptance “shall constitute” signing and returning an acknowledgment.
3. Whether the indemnity language was sufficiently clear and unequivocal to cover the indemnitee’s own negligence.

## Decision

- The Sixth Circuit affirmed judgment for Ford.
- The court held that the “sign and return” acknowledgment language described a method that would constitute acceptance but did not exclude acceptance by other reasonable means.
- Allied accepted Amendment No. 2 by commencing performance of the installation work with Ford’s consent and acquiescence, making the amendment’s terms effective before the injury.
- The indemnity provision was enforceable because it expressed in clear and unequivocal terms an intent that Allied indemnify Ford for injuries arising from the negligence of Ford’s employees in connection with Allied’s work.
- In the absence of fraud or concealment, Allied was bound to the terms it accepted through performance.

## Legal Principles

- An offer’s statement that signing and returning an acknowledgment “shall constitute acceptance” may be construed as permissive rather than exclusive unless the offer clearly makes that method the only valid means of acceptance.
- Acceptance may be implied from objective conduct; commencing and continuing performance with the offeror’s knowledge and acquiescence can form a contract incorporating the offer’s written terms.
- A later-signed acknowledgment can confirm an agreement already formed by performance; contract formation may occur when performance begins, not when paperwork is executed.
- Indemnity for the indemnitee’s own negligence is enforceable only if the contract expresses that intent in clear and unequivocal language.
- In commercial settings, absent fraud or deception, a party that performs under an offer containing attached terms is bound by those terms.

## Conclusion

Because Allied began performing the work contemplated by Amendment No. 2 with Ford’s consent and acquiescence, Allied accepted the amendment and its incorporated, clearly stated indemnity clause before the accident, and therefore owed Ford indemnity for liability arising from Ford’s negligence connected to the work.


Allied Steel & Conveyors, Inc. v. Ford Motor Co., 277 F.2d 907 (6th Cir. 1960)