ConAgra v. Nierenberg

Supreme Court of Montana · Contracts

ContractsUCCStatute of FraudsSales of GoodsMerchant Confirmationoral contractgrain salemerchant

Facts

Dennis Nierenberg, acting for himself and his father, called ConAgra's grain elevator manager on April 9, 1996, and discussed selling 12,500 bushels of wheat at $5.01 per bushel. ConAgra prepared a written confirmation reflecting those terms and Dennis undisputedly received it on April 19, 1996, but he never objected to it in writing within ten days. After receiving the confirmation, Dennis discussed reducing the quantity but did not state that no contract existed; he later sold the wheat to another elevator at a higher price. The dispute centered on whether the oral agreement was enforceable under the UCC despite the absence of Dennis's signature.

Issue

Whether the oral grain-sale agreement was enforceable under UCC § 30-2-201 despite the absence of a signed writing by the Nierenbergs. More specifically, whether Dennis made a sufficient judicial admission of contract formation, and whether ConAgra's written confirmation was received within a reasonable time under the merchant-confirmation exception.

Rule

Under § 30-2-201(3)(b), a party admits an oral contract for sale only if he deliberately, clearly, and unequivocally makes a statement of fact—not a legal conclusion or opinion—showing that an unconditional contract was made. Under § 30-2-201(2), between merchants, a writing in confirmation that is sufficient against the sender and received within a reasonable time satisfies the statute of frauds against the recipient unless the recipient gives written notice of objection within ten days. In determining reasonable time, courts consider the nature, purpose, and circumstances of the transaction, and may examine the sender's usual practice or policy and any excuse for deviation from it.

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

Ridgeview Feed Traders, a grain buyer in Fargo, orally discussed buying 9,000 bushels of corn from Caleb Morton, a farmer the court has already classified as a merchant. At trial in Bismarck, Caleb testifies, "Yes, I agreed to sell 9,000 bushels at $4.70 that day, and that agreement was final when we got off the phone."

If Ridgeview seeks to enforce the oral sale despite the absence of Caleb's signature, what is the strongest argument that the statute of frauds does not bar enforcement?

Explanation. The majority held that under UCC 2-201(3)(b), the statute of frauds is satisfied when the party against whom enforcement is sought makes a deliberate, clear, and unequivocal statement of fact in court showing that an unconditional oral contract was made. This hypothetical contains the sort of express admission missing in the case itself. Choice B confuses formation with enforceability, and Choices C and D ignore the judicial-admission exception. (Derived from ConAgra v. Nierenberg (n.d.).)