Bazak International Corp. v. Mast Industries, Inc.

New York Court of Appeals · 1989 · Contracts

ContractsStatute of FraudsUCC 2-201(2)Merchant's exceptionUCC 2-201merchant's exceptionconfirmatory writingStatute of Frauds

Facts

Accepting the complaint's allegations for purposes of the dismissal motion, the parties orally agreed on April 23, 1987 to the sale of textiles for $103,330. On April 30, at Mast's parent company's offices and following Mast agent Karen Fedorko's instructions, Bazak's president telecopied five signed purchase order forms on Bazak letterhead to Mast's Massachusetts office, and Mast sent written confirmation of receipt. The forms were dated April 23, listed detailed quantities, descriptions, prices, and payment terms, and included the handwritten notation "As prisented [sic] by Karen Fedorko." Mast made no written objection to the forms within 10 days but never delivered the textiles.

Issue

Whether signed purchase order forms sent by one merchant to another, retained without written objection, can qualify as confirmatory writings under UCC 2-201(2) even though they do not contain explicit words of confirmation and include printed language stating they are only an offer unless accepted in writing by the seller. Also, whether the complaint's fraud claim was sufficiently pleaded and not merely duplicative of the contract claim.

Rule

For purposes of UCC 2-201(2), neither explicit words of confirmation nor an express reference to a prior agreement is required. A writing between merchants satisfies the merchant's exception if, viewed from the documents themselves and without resort to parol evidence, it is sufficient against the sender and affords a basis for believing it reflects a real transaction between the parties; if received within a reasonable time by a party with reason to know its contents and no written objection is made within 10 days, the Statute of Frauds bar is removed. Failure to object does not prove the contract; it only permits the sender to attempt to prove that a contract was made and its terms.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

Lena Ortiz, a garment wholesaler in Los Angeles, and Devon Pike, a fabric distributor in Dallas, orally agree on the sale of 8,000 yards of twill at a stated unit price. Three days later, Lena sends a signed document listing exact quantities, colors, unit prices, and payment terms, but it does not say "confirming our agreement"; Devon receives it and sends no written objection within 10 days.

If Devon raises the Statute of Frauds, what is the strongest argument for Lena?

Explanation. Under the majority rule, explicit words of confirmation are not required for a writing between merchants to qualify under UCC 2-201(2). The question is whether the writing, viewed objectively and on its face, is sufficient against the sender and affords a basis for believing it reflects a real transaction between the parties. Failure to object within 10 days removes the Statute of Frauds bar, but it does not itself prove contract formation or all terms.