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In early January Al and Betty met at Al's office and discussed the possibility of Al's company, ALCO, providing Betty's business, B-PRINT, with a new printing press. The parties understood ALCO would manufacture the press according to detailed specifications provided by Betty. After explaining the type of printing press B-PRINT needed and giving Al a copy of the engineering designs for the press, Betty said: "If we can agree about a suitable price, I'd like to purchase the press from you." Al replied: "I'm sure we can come to terms. I'll call you later in the day with a price." Betty said: "Alright, but remember, we need to have the press delivered by March 1, so our crew can install it by March 15, that's when we plan to start using it." Al responded: "If we settle on a price by the end of the week, I know we can have it delivered to you by then." Al and Betty shook hands and Betty left.

Later, the same day, Al phoned Betty and said: "I think we're ready to go. We can have the new press delivered to you by March 1, for a price of $500,000." Betty replied: "Great! Go ahead and get started, we'll take care of any necessary paperwork later." Al said: "OK, but we will need a purchase order from you before we can begin work" Betty replied: "Will do -- Thanks for your help" and hung up.

Despite what he said to Betty about needing a purchase order, Al immediately took the engineering designs to the manufacturing division which began work on the press later that same week.

A few weeks later, after ALCO had begun work, Al phoned Betty with a proposal: "If you can wait until March 7 to take delivery of the press, we're prepared to give you a 5% discount, reducing the price to $475,000." Betty replied: "I don't know if we can do that, we need to have it installed by March 15, or we'll lose out on the opportunity to bid on several profitable jobs that will need to be completed by April 1." Al answered: "Well, to tell you the truth, there's no way we can finish the press by March 1. Your designs were harder to implement than we had expected, and it's going to take us a little more time than we had expected. That's why we're willing to discount the price. If you can't agree to the later delivery, we're just going to have to back out of the deal altogether. And I need to know by the end of the day tomorrow."

In response to this unexpected development Betty said: "I'll see what I can do," and hung up. Betty then undertook steps to rearrange B-PRINT'S production schedule to permit the company to delay receipt of the press until March 7, and still be able to take advantage of the jobs that would need to be completed by April 1. These steps would cost B-PRINT $20,000, but with the $25,000 price discount from ALCO, the additional cost would be made up by the reduced price. Betty immediately implemented the changes necessary to accommodate ALCO's demand for more time at a reduced price.

The day after their conversation Betty called Al and said: "I've got good news." Al cut Betty off and said: "No -- I've got good news for you. We've decided that we'll be able to finish by March 1, after all. There's no need for us to change anything." Betty replied: "But I've already made the changes necessary to enable us to take delivery on March 7. We've stopped the presses on a job we were already working on. It will cost me thousands extra to reverse everything again. You can't do this -- I still expect to get the price reduction." Al said: "Sorry -- we'll be delivering the press according to our original agreement and will expect payment according to our original deal." The next day Betty sent Al a signed purchase order that said: "$475,000 -- Delivery by March 7." Al ignored it, completed work on the press, and delivered it on March 1, together with an Invoice for $500,000.

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