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GPL Treatment, Ltd. v. Louisiana-Pacific Corp

    Brief Fact Summary. Treatment, Ltd., (Plaintiff), brought suit to recover profit losses on the alleged agreement to sell Louisiana-Pacific Corp., (Defendant), 88 truckloads of cedar shakes. Defendant denies this claim and asserts an affirmative defense that Plaintiff’s claims are barred by the U.C.C. Statute of Frauds under the merchant’s exception. Defendant moved in limine to prevent Plaintiff from introducing its confirmation forms based on the Statute of frauds alleging that by not signing and returning the forms, the contract failed to become final.

    Synopsis of Rule of Law. Under the merchant’s exception of the U.C.C. Statute of Frauds, a writing in confirmation of a contract must be signed by the sender, state a quantity and evidence a contract for the sale of goods. A written confirmation sent pursuant to the merchant’s exception need not contain all material terms of a contract, it need only confirm a contract and include a quantity term.

    Facts. Defendant and Plaintiff are merchants. Defendant had an oral contract to buy a large quantity of cedar shakes with a representative of Plaintiff. Plaintiff’s representative filled out and signed 6 order confirmation forms stating the price and quantities of product being sold and sent copies to Defendant. Thereafter the market price of the cedar shakes dropped and Defendant’s needs changed. Defendant negotiated with a different representative of Plaintiff who wrote a new order revising the prices and quantities of product being sold to Defendant. New confirmation orders were signed and copies sent to Defendant. Defendant did not submit a written objection within 10 days. Defendant accepted delivery of 13 truckloads of shakes from Defendant. When it did not request delivery of the remainder of the order, Plaintiff contacted Defendant asserting it had contracted to deliver 75 additional trucks. Defendant responded it had only agreed to purchase the 13 it had already received.

    Issue. Whether when a merchant seller sends to a merchant buyer a writing labeled “ORDER CONFIRMATION” that contains a “Sign and Return” clause, does the writing constitute a “writing in confirmation of the contract and sufficient against the sender” under the U.C.C. Statue of Frauds.

    Held. Yes. Such order confirmation forms constitute a writing in confirmation of the contract and sufficient against the sender and thus they satisfy the merchant’s exception.

    Discussion. Defendant concedes that Plaintiff’s order confirmation forms contain all the elements necessary to confirm an order. Defendant argues that because the forms require Defendant to sign the order confirmation form on the “order accepted by” line and to return that page, Plaintiff has indicated its intention that the agreement would become final only after Defendant signaled its approval of the quoted terms. Therefore these forms are evidence merely of an offer inviting Defendant’s acceptance.
    Notwithstanding the “order accepted by” line and the “sign and return” clause, the order confirmation forms are sufficient to satisfy the merchant’s exception. The label alone is not dispositive. Here, the forms as a whole also demonstrate that they are what they are labeled. They unambiguously identify the parties to the alleged oral contract, the prices, and the quantities of the goods being sold. These forms would have been sufficient against the sender, Plaintiff, if it had so wished to rescind. The forms are nothing more than request for acknowledgment of receipt. Therefore they were sufficient to satisfy the merchant’s exception.


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