GPL Treatment, Ltd. v. Louisiana-Pacific Corp.
State Court (Pacific Reporter)4/11/1996
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[[COURTLISTENER_SUBOPINION {"id":"9534385","type":"020lead","part":"majority","author":"Van Hoomissen","source_field":"html_with_citations"}]]
*118 VAN HOOMISSEN, J. This case involves the so-called âmerchantâs exceptionâ to the statute of frauds in the Oregon Uniform Commercial Code (UCC). ORS 72.2010(2). 1 Plaintiffs (GPL) 2 sued defendant Louisiana-Pacific (L-P) seeking damages for breach of an alleged oral contract to buy 88 truckloads of cedar shakes. L-P denied the alleged contract and asserted the UCC statute of frauds, ORS 72.2010(1), as an affirmative defense. GPL relied on the merchantâs exception. ORS 72.2010(2). The trial court denied L-Pâs motions in limine to exclude evidence of the âwritingâ that GPL sent to L-P and for a directed verdict concerning GPLâs alleged noncompliance with ORS 72.2010(1). After a jury verdict for GPL, the trial court entered judgment for GPL. The Court of Appeals affirmed. GPL Treatment, Ltd. v. Louisiana-Pacific Corp., 133 Or App 633 , 894 P2d 470 (1995). For the reasons that follow, we also affirm. On appeal from the denial of L-Pâs motion for a directed verdict based on GPLâs alleged noncompliance with the UCC statute of frauds, the court reviews for errors of law, accepting all facts and inferences in the light most favorable to GPL. 3 *119 The GPL companies manufacture and sell cedar shakes. L-P has bought shakes from all three GPL companies in the past. The parties are âmerchantsâ within the meaning of ORS 72.2010(2). See ORS 72.1040(1) (defining âmerchantâ). 4 In the spring of 1992, Feaver, GPLâs sales representative, met with Cunnally, a shake trader for L-P. In May 1992, Feaver and Cunnally reached an oral agreement for L-P to buy a large quantity of cedar shakes from GPL. Feaver filled out and signed six of GPLâs four-part order confirmation forms. Each form stated the prices and quantities of product being sold to L-P. Feaver sent L-P the top two copies of each of the six four-part order confirmation forms. Because of the nature of this case, it is necessary to describe GPLâs order confirmation form in detail. It contains four pages, each of which bears the words âORDER CONFIRMATIONâ in the upper right hand corner. Pages one and two of the form are sent to a customer who places an order with GPL. The text at the bottom of pages one and two is different. The relevant text at the bottom of page one reads: âCONDITIONS OF SALES: GPL LTD. âAll orders accepted subject to strikes, labor troubles, car shortages or other contingencies beyond our power to control. Any freight rate increases, sales, or use taxes is for buyers account. âSIGN CONFIRMATION, COPY AND RETURN BY:_ THANK YOUâ Page two does not contain the âConditions of Salesâ wording or the âsign-and-returnâ clause found on page one. Instead, the relevant text at the bottom of page two reads: âORDER ACCEPTED BY:_ GPL LTD. FIRM NAME - BY:_ âSIGNATURE & TITLE DATE THANK YOUâ *120 Thereafter, the price of shakes dropped and L-Pâs needs for shakes changed. Feaver and Cunnally continued to negotiate. In June or early July 1992, GPLâs Clarke also negotiated with Cunnally about the same matters. After talking with Cunnally, Clarke wrote a new order, revising the prices and quantities of product being sold to L-P. Clarke then telephoned GPLâs employee, Shemeck, and told him to send written confirmations of the new orders to L-P. Sher-neck did so, using GPLâs order confirmation forms, which he signed. Each form stated the prices and quantities of product being sold to L-P. L-P did not give written notice of objection within 10 days. In July 1992, L-P accepted delivery of 13 truckloads of shakes from GPL. When L-P did not request delivery of the remainder of the order, GPL became concerned and contacted L-P, asserting that it had a contract to deliver 75 additional truckloads of shakes. L-P responded that it had agreed to purchase only the 13 truckloads that it had already received. The GPL companies then brought this action to recover their respective profit losses on the alleged agreement to sell L-P 88 truckloads of shakes. In addition to denying GPLâs claim, L-P asserted as an affirmative defense that GPLâs claims were barred by ORS 72.2010(1), the UCC statute of frauds. Before trial, L-P moved in limine to prevent GPL from introducing its order confirmation forms into evidence, arguing that, as a matter of law, they did not satisfy the merchantâs exception to the UCC statute of frauds, because, L-P asserted, GPLâs forms required L-P to sign and return a copy indicating L-Pâs acceptance of GPLâs offer. 5 Thus, L-P argued, by instructing L-P to sign and return the confirmation copy on the âorder accepted byâ line, GPL indicated its intention that the contract is to become final only after L-Pâs approval *121 of the quoted terms. The trial court denied L-Pâs motion holding, as a matter of law, that GPLâs order confirmation forms were sufficient confirmations of an oral agreement to satisfy ORS 72.2010(2). At the close of GPLâs case, L-P moved for a directed verdict, again arguing that GPLâs order confirmation forms did not satisfy the merchantâs exception. The trial court also denied that motion. A jury later found that L-P had breached an oral contract to buy 88 truckloads of shakes from GPL. L-P appealed. The Court of Appeals affirmed. GPL Treatment, Ltd., 133 Or App at 642 . Judge Leeson dissented, concluding that GPLâs order confirmation forms unambiguously required L-P to sign and return page two, acknowledging that the orders were âaccepted.â Therefore, according to the dissent, GPLâs writings were merely offers to L-P to enter into a contract that did not satisfy the merchantâs exception. Id. at 646 . We allowed L-Pâs petition for review. L-P contends that the Court of Appeals erred in affirming the trial courtâs ruling denying its motions in lim-ine and for a directed verdict on the ground that the alleged oral contract for the sale of shakes fails to comply with the statute of frauds. L-P argues that, as a matter of law, GPLâs order confirmation forms do not satisfy the merchantâs exception, because they require a signed acceptance by L-P. L-P further argues that the Court of Appealsâ decision is contrary to case law from other jurisdictions that have adopted the UCC. See ORS 71.1020(2)(c) (one of the purposes of the Oregon UCC is â [t] o make uniform the law among the various jurisdictionsâ). GPL responds that the rule advocated by L-P is inconsistent with the official commentary and existing case law interpreting the relevant UCC provisions, and that adoption of the rule advocated by L-P would offend settled contract law and contradict the stated policy of the UCC. The question thus presented is: When a merchant seller sends to a merchant buyer a writing labeled âORDER CONFIRMATIONâ that contains a âsign and returnâ clause, does the writing constitute a âwriting in confirmation of the contract and sufficient against the senderâ under ORS 72.2010(2)? Whether a writing in confirmation of an oral contract satisfies the statute of frauds is an issue of law for the court. *122 See Can-Key Industries, Inc. v. Industrial Leasing Corp., 286 Or 173, 183-84 , 593 P2d 1125 (1979) (determination of whether UCC provision applies, given undisputed facts, was a question of law); Commercial Credit Corp. v. Marden, 155 Or 29, 39-40 , 62 P2d 573 (1936) (same rule before adoption of UCC). In contrast, questions about whether a party received the writing, whether it was received within a reasonable time, whether the receiver had reason to know its contents, sent objections, or the like, are questions of fact. See Ronald A. Anderson, 2 Uniform Commercial Code, § 2-201:146 (3rd ed 1982 and Supp 1995). The statute of frauds is generally considered to be an affirmative defense, which must be specially pleaded. The party raising the statute of frauds defense also has the burden of proving it. If the defense fails because of the merchantâs exception, the proponent of the oral contract still has the burden of proving that in fact a contract was made before the proponent issued the written confirmations. See Willamette-Western Corp. v. Lowry, 279 Or 525, 531-32 , 568 P2d 1339 (1977) (the proponent of the contract has the burden of persuading the trier of fact that in fact an oral contract was made before the written confirmation); Tripp v. Payân Pak Stores, Inc., 268 Or 1, 7 , 518 P2d 1298 (1974) (so stating under statute of frauds applicable to the sale of investment securities). To avoid a statute of frauds defense under ORS 72.2010(1), there must be some writing sufficient to indicate that a contract for sale has been made between the parties. The writing must be signed by the party against whom enforcement is sought, state a quantity, and evidence a contract for the sale of goods. UCC § 2-201 official comment 1 (1993); see Roboserve, Ltd. v. Tomâs Foods, Inc., 940 F2d 1441, 1448, (11th Cir 1991) (so stating in applying Georgia statute). Similarly, under the merchantâs exception, ORS 72.2010(2), a writing in confirmation of the contract must be signed by the sender, state a quantity, and evidence a contract for the sale of goods. See William D. Hawkland 2 UCC Series § 2-201:05 (1992 and Supp 1994); Anderson, 2 Uniform Commercial Code § 2-201:128-188; White and Summers, 1 Uniform Commercial Code § 2-5 (4th ed 1995). A written confirmation sent *123 pursuant to the merchantâs exception need not contain all material terms of a contract; it must simply confirm a contract and include a quantity term. See, e.g., Fort Hill Lumber v. Georgia-Pacific, 261 Or 431 , 493 P2d 1366 (1972) (buyerâs letter confirming partiesâ oral contract to buy and sell logs satisfied ORS 72.2010(2)). UCC § 2-201, official comment 1 (1993); see Security Bank v. Chiapuzio, 304 Or 438 , 445 n 6, 747 P2d 335 (1987) (in adopting the UCC, the Oregon legislature took note of the official comments, which are statements of purpose). 6 A merchant who receives a confirmatory writing complying with the requirements of ORS 72.2010(2) may escape being bound only by giving written objection to the contents of the writing within 10 days after receipt. Silence by the receiver does not affect a valid confirmation. A determination that a writing satisfies the merchantâs exception does not prove the existence of a contract, however. It merely prevents the party against whom enforcement is sought from raising the UCC statute of frauds as an affirmative defense. In construing ORS 72.2010(2), this courtâs task is to discern the intent of the legislature. This court looks first to the text and context of the statute. PGE v. Bureau of Labor and Industries, 317 Or 606, 611 , 859 P2d 1143 (1993). The relevant phrase of ORS 72.2010(2) is âa writing in confirmation of the contract and sufficient against the seller.â ORS 72.2010(2) provides no further information about what specific words, forms, or writings suffice as a âwriting in confirmation of the contractâ and, in addition, show that a writing is âsufficient against the sender.â We proceed to examine the context of the statute. ORS 71.1020 provides in part: â(1) The Uniform Commercial Code shall be liberally-construed and applied to promote its underlying purposes and policies. *124 â(2) Underlying purposes and policies of the Uniform Commercial Code are: â(a) To simplify, clarify and modernize the law governing commercial transactions; â(b) To permit the continued expansion of commercial practices through custom, usage and agreement of the parties; â(c) To make uniform the law among the various jurisdictions.â In examining the context of the statute, we also look to the decisions of other jurisdictions that have considered the merchantâs exception. See Security Bank, 304 Or at 445 n 6 (recognizing that decisions of other courts that have examined these questions are relevant). The cases cited by the parties, however, do not supply any bright-line rule that a writing with a âsign confirmation copy and returnâ clause on one page followed by an âORDER ACCEPTED BYâ clause on the next page either do or do not satisfy the merchantâs exception in any given case. The outcome in any given case depends primarily on an evaluation of the specific writing at hand. For example, L-P relies on Great Western Sugar Co. v. Lone Star Donut Co., 567 F Supp 340 (ND Tex 1983) aff'd 721 F2d 510 (5th Cir 1983). In that case, Great Western Sugar (GWS), the seller, brought an action against Lone Star, the buyer, for breach of an alleged oral contract. GWS had sent Lone Star a letter in âconfirmationâ of the alleged agreement and Lone Star had not objected within 10 days. The GWS letter concluded as follows: â âThis letter is a written confirmation of our agreement * * *. Please sign and return to me the enclosed counterpart of this letter signalling your acceptance of the above agreement.â â Id. at 341 (emphasis added). It was undisputed that Lone Star did not sign the letter in confirmation. At issue was whether that letter satisfied the merchantâs exception. The trial court held that GWS âunambiguously indicated, by the language concluding the letter agreement, the manner and medium of acceptance: the buyer was to sign and return a copy.â Id. at 343 . Consequently, the *125 court concluded that, at best, the letter was an offer and not a âwriting in confirmationâ of a prior oral agreement: âA true confirmation requires no response. Having presented Lone Star with a renewed opportunity to weigh the benefits of a bargain and escape it, GWS cannot rely on the 1981 letter agreement to satisfy the requirements of the statute of frauds.â Id. at 342 . The Fifth Circuit affirmed â[flor the reasons stated in the careful opinion of the trial court.â 721 F2d at 510. On the other hand, GPL relies on Bazak Intern, v. Mast Industries, 73 NY2d 113 , 535 NE2d 633 (1989). That case held that annotated purchase order forms signed by the buyer, sent to the seller and retained without objection, fell within the merchantâs exception, satisfying the statutory requirement of a writing even without the sellerâs signature. Bazak, the buyer, and Mast, the seller, had reached an oral agreement for Bazak to buy textiles from Mast. Bazak sent purchase orders to Mast. Id. at 634. Those orders, describing the quantities and prices of the goods to be purchased from Mast, all contained the notation, â[a]s presented by [Mastâs representative].â Printed on the orders were the words: âThis is only an offer and not a contract unless accepted in writing by the seller, and subject to prior sale.â Id. at 635. There were two signature lines: one for Bazak and one labeled âcustomerâs acceptanceâ for Mast. The line for Bazak was signed, but the customer acceptance line for Mast was not signed. Mast argued that the writing did not satisfy the merchantâs exception to the statute of frauds, because it stated âthis is only an offer and not a contract unless accepted in writing by the seller and subject to prior sale,â and Mast had not signed on the customer acceptance line. In rejecting Mastâs argument, a majority of the New York Court of Appeals stated: âWhile an express disclaimer generally would suffice to disqualify a memorandum as confirmatory of an oral agreement * * *, it is plain from the face of these documents that the printed matter was entirely irrelevant to the dealings between these parties. The forms themselves bespeak their purpose: to record a sale by Bazak as seller, not a purchase *126 by Bazak as buyer. The language regarding claims, allowances and returns are clearly all referable to a transaction in which Bazak was the seller, as is the signature line for Bazak. Read literally, these forms would not even have allowed for Mastâs signature; the line for âCUSTOMERS ACCEPTANCEâ is obviously inapplicable â Bazak, not Mast, was the customer. In short, though Mast is free to argue at trial that different inferences should be drawn, the forms indicate that Bazak simply used its sellerâs documents to record its confirmation of the alleged contract, and that the small print at the bottom of the page was no part of that communication.â Id. at 638. Although Bazak may stand for the proposition that the existence of a âcustomer acceptanceâ signature line that has not been signed does not automatically prevent a writing from satisfying the merchantâs exception, we do not find that it offers compelling support to GPL here, because the facts of the two cases are so different. The courtâs holding in Bazak rested on its conclusion that the printed order form containing the signature lines and the ânot a contractâ phrase were ânot relevantâ in the context in which the transaction occurred. Thus, Bazak, while acknowledging the general rule, distinguished the case on its peculiar facts. In contrast to Bazak, GPLâs order confirmation forms at issue in this case were used for the specific purpose for which they were designed. We have reviewed the cases cited by the parties and others found during our research and we conclude, as did the Court of Appeals, that there is no single correct answer to the question of the effect of a âsign and returnâ clause. 7 Each writing must be examined independently and in the light of its own contents and context. Finding little clear guidance in the text or context, including case law, of ORS 72.2010(2), we next consider legislative history to inform this courtâs inquiry into legislative *127 intent. PGE, 317 Or at 611-12 . That inquiry, however, also provides little help. See Security Bank, 304 Or at 445 n 6 (âThe Uniform Commercial Code was adopted in Oregon with little debate or discussion of the legislative intent.â). Finally, we find no assistance in resort to general maxims of statutory construction to aid our inquiry. PGE, 317 Or at 612 . We turn to the writings at issue in this case, i.e., GPLâs order confirmation forms. L-P concedes that GPLâs order confirmation forms contain all the elements necessary to confirm an order. L-P argues, however, that, because GPLâs forms require L-P to sign the order confirmation form on the âorder accepted byâ line and to return that page, GPL has indicated its intention that the agreement would become final only after L-P signaled its approval of the quoted terms. L-P argues GPLâs order confirmation forms evidence a mere offer that requires L-P to return a signed acceptance as a prerequisite to the formation of a contract. Considering GPLâs writing in its entirety, however, we conclude that L-Pâs reading is not supported by the writings themselves. We make a case-specific determination that, notwithstanding the âsign and returnâ clause and the âorder accepted byâ signature line, GPLâs order confirmation forms are sufficient to satisfy the merchantâs exception. GPLâs forms are prominently labeled âORDER CONFIRMATION.â That labeling, standing alone, however, would not be dispositive unless the forms as a whole also demonstrate that they are what they are labeled. GPLâs order confirmation forms unambiguously identify the parties to the alleged oral contract and the prices and quantities of the goods being sold. Each form was signed by GPL and sent to L-P, which did not object within 10 days of receipt. GPLâs forms would have been âsufficientâ against GPL, the sender, if GPL had attempted to rescind the contract because, for example, the price of cedar shakes had gone up substantially. We are unpersuaded by L-Pâs argument that inclusion of the words âsign confirmation copy and returnâ on GPLâs order confirmation forms indicate any intention on GPLâs part that it was not bound until L-P signed and returned copies of the forms indicating its *128 approval. We do not read GPLâs order confirmation forms to require L-P to signal its acceptance of the terms and conditions of the parties alleged oral agreement. Rather, we read the forms to be nothing more than a request for an acknowledgment of the receipt of GPLâs forms. Thus read, GPLâs âsign and returnâ clause and its âorder accepted byâ signature line were merely record keeping devices of GPL. We hold, therefore, that GPLâs forms were sufficient to satisfy the merchantâs exception of ORS 72.2010(2). In summary, we conclude, as a matter of law, that GPLâs order confirmation forms constitute âa writing in confirmation of the contract and sufficient against the senderâ and, thus, that they satisfy the merchantâs exception. ORS 72.2010(2). Accordingly, we hold that the trial court did not err in denying L-Pâs motions in limine and for a directed verdict on its affirmative defense of the UCC statute of frauds. The decision of the Court of Appeals and the judgment of the circuit court are affirmed. ORS 72.2010 provides in part: â(1) Except as otherwise provided in this section a contract for the sale of goods for the price of $500 or more is not enforceable by way of action or defense unless there is some writing sufficient to indicate that a contract for sale has been made between the parties and signed by the party against whom enforcement is sought or by the authorized agent or broker of the party. A writing is not insufficient because it omits or incorrectly states a term agreed upon but the contract is not enforceable under this subsection beyond the quantity of goods shown in such writing. â(2) Between merchants, if within a reasonable time a writing in confirmation of the contract and sufficient against the sender is received and the party receiving it has reason to know its contents, it satisfies the requirements of subsection (1) of this section against such party unless written notice of objection to its contents is given within 10 days after it is received.â ORS 72.2010 is a verbatim codification of UCC § 2-201(1) and (2). Although plaintiffs, GPL Treatment, Ltd., Scott Cedar Products, and Black-hawk Forest Products, Ltd., are separate companies, their legal arguments are identical. In this opinion, we refer to them collectively as GPL. The statute of frauds is a substantive rule of contract law that promotes commercial certainty by allowing contracting parties to rely on the ultimate written expression of their agreement as embodying the terms of their agreement. Onita Pacific Corp. v. Trustees of Bronson, 315 Or 149, 162 , 843 P2d 890 (1992). L-P does not dispute that it received the writings that GPL contends satisfy the merchantâs exception or that the writings were received within a reasonable time. Nor does L-P argue that it did not have reason to know the contents of the writings. The UCC included the merchantâs exception to the statute of frauds to correct a pre-Code invitation to fraud. Under prior law, if one party sent a confirmation of an oral sale of goods to the other party, the sender was bound to the contract, but the receiver was not. If the seller sent the confirmation, and then the market price of the goods fell, the statute of frauds was no bar to the buyer denying the oral agreement. See Henry J. Bailey III, 1 The Oregon Uniform Commercial Code § 2.18 (2d ed 1990) (explaining rationale for the merchantâs exception). For analysis and citations to cases supporting the above principals, see Randy R. Koenders, Annotation, Sales: Construction of Statute of Frauds Exception Under UCC § 2-201(2) For Confirmatory Writing Between Merchants, 82 ALR 4th 709 (1990 and 1994 Supp). See generally, Comment, The Merchants Exception To The Uniform Commercial Codeâs Statute of Frauds, 32 Vill L Rev 133 (1987). See, e.g., Transammonia Export Corp. v. Conserv. Inc., 554 F2d 719 (5th Cir 1977); Busby, Inc. v. Smoky Valley Bean, Inc., 767 F Supp 235 (D Kan 1991); Kline Iron & Steel Co. Inc. v. Gray Comm. Consultants, Inc., 715 F Supp 135 (D SC 1989); Colorado-Kansas Grain Co. v. Reifschneider, 817 P2d 637 (Colo App 1991); Adams v. Petrade Intern. Inc., 754 SW2d 696 (Texas App 1988); Nations Enterprises, Inc. v. Process Eqmt. Co., 40 Colo App 390, 579 P2d 655 (1978).
[[COURTLISTENER_SUBOPINION {"id":"9534386","type":"030concurrence","part":"concurrence","author":"Fadeley","source_field":"html_with_citations"}]]
FADELEY, J., concurring. I agree with the basis of analysis and the holding of the majority opinion. I write separately to emphasize the following points. The jury found that the buyer breached a sales contract and awarded damages to the seller. On the basis of the merchantâs exception this court upholds the jury award against an attack that the case should never have been submitted to the jury for want of a writing to satisfy ORS 72.2010. The merchantâs exception, found in ORS 72.2010(2), differs from the formal requirements to satisfy the statute of frauds stated in ORS 72.2010(1) because, to be sufficient under that exception, the terms of a writing between merchants need only be sufficient to bind the sender of the writing, who is not necessarily the party against whom enforcement is being sought. James J. White and Robert S. Summers, 1 Uniform Commercial Code, § 2.5, 66, 68-69 (4th ed 1995). See also, Ingrid Michelsen Hillinger, The Article 2 Merchant Rules: Karl Llewellynâs Attempt to Achieve The *129 Good, The True, The Beautiful in Commercial Law, 73 Geo U 1141 (1985) (explaining that the distinction between merchants and nonmerchants is an intentional one that creates a classification on which the UCC bases different rules and different results). Because the written âOrder Confirmationâ evidenced a contract, stated the quantity involved, and was signed by and bound the sender, it satisfied the merchantâs exception to the statute of frauds, as stated in ORS 72.2010(2). See, e.g., Fort Hill Lumber v. Georgia-Pacific, 261 Or 431, 436 , 493 P2d 1366 (1972) (holding that buyerâs letter, signed only by buyer, was sufficient to satisfy ORS 72.2010(2) where defendant, seller, argued that the letter contained indefinite and inconsistent terms). Cases in accord are collected in White and Summers, above; see R.A. Hillman, Common Law and Equity Under the Uniform Commerical Code, ¶ 3.02[2], 3-4, 3-5 (1985) (quoting the drafter of the code concerning dealings between merchants). 1 The verdict and judgment thereon in this case must stand. Moreover, the preprinted line on seller-senderâs form, âsign confirmation copy and return,â does not state that doing so is a condition of the sender being bound. In transactions between merchants, care must be taken not to defeat the purpose of ORS 72.2010(2). It would defeat that purpose if a court imposes some sort of presumption that providing a signature line for acceptance, or requesting an acknowledgment signature of buyer, serves to make the sale conditional on that signature or means that the sender is not bound, absent a clear statement in the document that the transaction is conditional. Neither uniformity nor stability of transactions will be forwarded by case-by-case decision making. ORS 72.1040 defines âmerchantâ and âbetween merchants.â No one contends in this case that either party is not a merchant. The official commentary to UCC § 2-201 states: âOnly three definite and invariable requirements as to the memorandum are made by this subsection. First, it must evidence a contract for the sale of goods; second, it must be âsignedâ, a word which includes any authentication which identifies the party to be charged [Âż.e., the sender]; and third, it must specify a quantity.â (Emphasis added.)
[[COURTLISTENER_SUBOPINION {"id":"9534387","type":"040dissent","part":"dissent","author":"Graber","source_field":"html_with_citations"}]]
*130 GRABER, J., dissenting. I dissent. In my view, the writing in this case does not satisfy the âmerchantâs exceptionâ to the statute of frauds in the Uniform Commercial Code. ORS 72.2010 provides in part: â(1) Except as otherwise provided in this section a contract for the sale of goods for the price of $500 or more is not enforceable by way of action or defense unless there is some writing sufficient to indicate that a contract for sale has been made between the parties and signed by the party against whom enforcement is sought or by the authorized agent or broker of the party. A writing is not insufficient because it omits or incorrectly states a term agreed upon but the contract is not enforceable under this subsection beyond the quantity of goods shown in such writing. â(2) Between merchants, if within a reasonable time a writing in confirmation of the contract and sufficient against the sender is received and the party receiving it has reason to know its contents, it satisfies the requirements of subsection (1) of this section against such party unless written notice of objection to its contents is given within 10 days after it is received.â ORS 72.2010(2), the merchantâs exception, applies if, but only if, all its elements are met. If that exception applies, GPL would prevail. If the merchantâs exception does not apply, then ORS 72.2010(1) does, and L-P would prevail. It is undisputed in this case that the parties are merchants, that the document in question was received within a reasonable time, that the recipient had reason to know the contents of the document, and that the recipient did not give notice of objection within 10 days after receipt. That being so, the dispositive question is whether the writing that GPL sent to L-P constituted âa writing in confirmation of the contractâ or, instead, constituted something less, such as an offer. Both the majority and the concurrence focus on the nature of the merchantâs exception, its difference from the usual statute of frauds, and the requirement that the writing be sufficient against the sender. 323 Or at 122-23 (Van Hoomissen, J.); 323 Or at 128-30 (Fadeley, J., concurring). *131 That discussion is beside the point. The disputed issue is whether the writing here is âin confirmation of the contractâ and thus whether the merchantâs exception, ORS 72.2010(2), applies at all. An analysis of the document at issue leads me to conclude that the merchantâs exception was not satisfied, because that document was not âa writing in confirmation of the contract.â ORS 72.2010(2). The first page of the document is labeled âORDER CONFIRMATION.â At the bottom of the page, the following material appears (after several other lines of text) below a general heading of âCONDITIONS OF SALESâ: âSIGN CONFIRMATION COPY AND RETURN.â The second page of the document, also labeled âORDER CONFIRMATION,â has different wording at the bottom. The second page contains this at the bottom left: âORDER ACCEPTED BY:_ FIRM NAME âSIGNATURE & TITLE DATEâ The majority holds that the foregoing document does not require the recipient to sign the confirmation copy and return it. The majority reasons: âwe read the forms to be nothing more than a request for an acknowledgment of the receipt of GPLâs forms.â 323 Or at 128. The majorityâs reasoning is flawed for four reasons. First, under the majorityâs reading of the document, the key word âORDERâ is deemed to mean two different things on the same page of the same document written by the same person. In the phrase âORDER CONFIRMATION,â the majority construes the word âORDERâ to refer to the substantive terms of the agreement to order goods. If it were otherwise, the majority could not hold that the document is sufficient to constitute âa writing in confirmation of the contract.â ORS 72.2010(2). Yet, in the phrase, âORDER ACCEPTED BY,â the majority construes the word âORDERâ to refer only to GPLâs invoice. Logic and common sense demand that the same word on the same page of the same document written by the same person mean the same thing. Cf. PGE v. Bureau of Labor and Industries, 317 Or 606, 611 , 859 P2d 1143 (1993) (âuse of the same *132 term throughout a statute indicates that the term has the same meaning throughout the statuteâ). In this case, the context demonstrates that âORDERâ in each instance refers to the substantive terms of the agreement to order goods. Second, the majority drains all the blood from the word âACCEPTED.â In the context of a commercial document of this kind and of the UCC, the word âacceptedâ is most likely to refer either to âacceptanceâ of an offer so as to form a contract or to âacceptanceâ of goods. See Hogan v. Alum. Lock Shingle Corp., 214 Or 218, 226 , 329 P2d 271 (1958) (â[i]t is hornbook law that the existence of a contract is grounded on offer and acceptance and there is no agreement until the offer has been accepted in accordance with its very termsâ); ORS 72.1030(2)(a), 72.6060 (defining âacceptance of goodsâ for purposes of Article 2 of the UCC). Moreover, even in common parlance, to âacceptâ means to âassent to the receipt of,â âto make an affirmative or favorable response to,â or âto assume * * * an obligation to pay.â Websterâs Third New Intâl Dictionary, 10-11 (unabridged ed 1993). That definition requires an affirmative act, and it also implies that the option of rejection, its antonym, is available as an alternative response to the thing as to which acceptance is being sought. The words âACCEPTED BYâ imply that the recipient must act further before an order (contract) comes into existence, whether those words are given their ordinary meaning or a more specialized meaning. The drafter of the document at issue chose the active âACCEPTED BY,â not the passive âRECEIVED BYâ or âACKNOWLEDGED BYâ that would be consistent with a confirmation. Yet, the majority reads âACCEPTEDâ to mean nothing more than âa request for an acknowledgment of* * * receipt.â In addition to giving inconsistent meanings to âORDERâ and no effect to âACCEPTED,â the majorityâs opinion gives no weight to the nature and location of the phrase âSIGN CONFIRMATION COPY AND RETURN.â The flatly worded directive â âSIGN CONFIRMATION COPY AND RETURNââ is mandatory. Additionally, the fact that that phrase appears below the heading âCONDITIONS OF SALESâ suggests that the requirement to sign and return the *133 copy was a condition that had to be satisfied before an order (contract) came into existence. As the court stated in Great Western Sugar Co. v. Lone Star Donut Co., 567 F Supp 340, 342 (ND Tex 1983), aff'd 721 F2d 510 (5th Cir 1983), â[a] true confirmation requires no response.â Here, as in Great Western Sugar Co., the document required the prospective buyer to sign and return a copy, thus reducing the document to the status of an offer that would take effect if and when it was âACCEPTED BYâ a representative of the buyer. Other decisions are to similar effect. See, e.g., Adams v. Petrade Intern., Inc., 754 SW2d 696, 706-07 (Ct App Texas 1988) (a writing did not satisfy merchantâs exception even though it used the word âconfirmation,â because the writing required the recipient to sign and return a copy and had the word âACCEPTEDâ followed by a blank signature line); Kline Iron & Steel v. Gray Com. Consultants, Inc. 715 F Supp 135, 141-43 (CD SC 1989) (a writing did not satisfy the merchantâs exception when its printed âterms and conditionsâ were âfor immediate acceptanceâ and when the form provided a line labeled âACCEPTEDâ for the buyer to sign and date). Although none of the reported cases from other jurisdictions is exactly like this one, the theme of those cases is consistent: if the recipient is required to sign and return a copy for the purported âconfirmationâ to be âACCEPTED,â then the merchantâs exception is not satisfied. The majorityâs departure from that theme frustrates the legislatureâs directive to strive for uniformity among the jurisdictions that have adopted the UCC. See ORS 71.1020(2)(c) (stating that an â[u]nderlying purpose[ ] and policfy] ofâ the UCC is â[t]o make uniform the law among the various jurisdictionsâ). The majorityâs fourth error is its failure to give effect generally to the âCONDITIONS OF SALES.â Those conditions were not asserted to have been part of the alleged oral contract. Therefore, their presence as new material terms (even if other terms remained unchanged from earlier negotiations) made this document a new offer. *134 In summary, because the document at issue required a response, it did not constitute âa writing in confirmationâ of a prior oral agreement as required by ORS 72.2010(2). The document thus did not satisfy the merchantâs exception to the UCCâs statute of frauds, ORS 72.2010(1). 1 Accordingly, the trial court erred in failing to grant L-Pâs motion for a directed verdict on its affirmative defense of the statute of frauds. I respectfully dissent from the majorityâs contrary holding. Carson, C. J., and Gillette, J., join in this dissenting opinion. The concurring opinion discusses the nature of the merchantâs exception and its differences from the usual statute of frauds. That discussion is beside the point. The disputed issue is whether the merchantâs exception applies at all, an issue that the concurrence does not address.Case Information
- Court
- State Court (Pacific Reporter)
- Decision Date
- April 11, 1996
- Citation
- 914 P.2d 682
- Status
- Precedential