The Signed Confirmation That Drew No Objection
On March 3, Quinn, an Oklahoma pecan grower and merchant, called Retail, an Oklahoma specialty-food merchant, and orally agreed to sell 2,000 pounds of shelled pecans at $6.25 per pound, delivery April 15, payment net 30. Quinn said, 'I'll send a confirmation.' That day Quinn mailed a signed writing: 'Sold to Retail: 2,000 lbs. shelled pecans, $6.25/lb., delivery April 15; buyer pays freight.' Retail received the writing on March 5, logged it in its purchase file, and did not respond. Retail had no practice of objecting to confirmations. On April 1, Retail emailed, 'Market dropped; we're cancelling.' Quinn had turned down another buyer at $6.50 per pound and sues for breach. Retail asserts the Statute of Frauds and, alternatively, that the freight term was not part of the oral agreement and should not be enforced. The parties are merchants. No goods were delivered. Quinn has no other writing.
1. Is the oral agreement enforceable against Retail despite the UCC Statute of Frauds? Explain.
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Yes, as to quantity. Oklahoma has adopted UCC § 2-201. Under § 2-201(b), between merchants, a signed writing that confirms an oral contract and is sufficient against the sender is enforceable against the recipient if the recipient receives it and has reason to know its contents, unless the recipient objects in writing within 10 days. Quinn is a merchant, the writing is signed by Quinn, states a quantity of 2,000 pounds, and indicates a sale of goods. Retail is a merchant, received the writing on March 5, logged it, and did not object within 10 days. The confirmation therefore satisfies the Statute of Frauds against Retail, even though Retail did not sign. The contract is not enforceable beyond the quantity stated, but $12,500 is within that quantity.
2. Is the 'buyer pays freight' term binding on Retail? Explain.
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Not conclusively. The merchant confirmation exception makes the contract enforceable as to quantity, but UCC § 2-201(b) states that a writing is not insufficient because it omits or incorrectly states a term, while the contract is not enforceable beyond the quantity shown. The confirmation is not an offer or acceptance under § 2-207, so Retail's silence does not turn every term in the confirmation into a binding term. Retail may introduce parol evidence to show that the oral agreement did not allocate freight to the buyer. If the oral agreement was silent, the UCC gap-fillers determine delivery and risk, but the written phrase 'buyer pays freight' is not established merely by Retail's failure to object.
3. If Retail had mailed a written objection on March 12, how would the analysis change?
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If the objection was received by Quinn within 10 days after Retail received the confirmation, the merchant confirmation exception would not apply. The March 5 receipt gives Retail until March 15 to object in writing. A mailed objection on March 12 would ordinarily arrive within that period. Without the exception, Quinn would need a writing signed by Retail or another Statute of Frauds exception, such as part performance, specially manufactured goods, or an admission. Because no goods were delivered and Retail paid nothing, the oral contract would likely be unenforceable against Retail.