Migerobe, Inc. v. Certina U.S., Inc.

United States Court of Appeals for the Fifth Circuit · Contracts

Contractsstatute of fraudsUCC 2-201integrated writingssigned memorandumunsigned order formUCC 2-207additional terms

Facts

Migerobe, a retailer operating jewelry counters in department stores, sought to buy Certina watches at discounted prices for a Thanksgiving 'doorbuster' promotion intended to drive corollary sales. Certina's salesman Murff, after communicating with Certina vice president Wolfe and receiving inventory lists and a $45 price, negotiated with Migerobe on October 29, 1987, and reported a sale of more than 2,000 watches, which Certina's office recorded on a Certina order form. Certina later refused to ship the watches, explaining that the low price might create Robinson-Patman concerns. Migerobe then sued for breach and sought direct resale profits and consequential damages from lost corollary sales.

Issue

Whether the evidence was sufficient to support the jury's finding that an enforceable contract existed despite the statute of frauds, that Murff had authority to bind Certina, and that Migerobe could recover consequential damages for lost corollary sales. The court also considered whether the district court erred in refusing Certina's requested jury instruction based on terms printed on Migerobe's later purchase order.

Rule

Under Mississippi law, the UCC statute of frauds is satisfied when integrated writings, including signed and unsigned documents connected by express reference or internal evidence of unity, indicate that a contract for sale has been made, are signed by the party to be charged, and specify quantity. Actual authority may be express or implied, while apparent authority requires acts of the principal indicating authority, reasonable reliance by the third party, and a detrimental change of position. Consequential damages are recoverable when the seller had reason to know of the potential loss at the time of contracting, the breach proximately caused the loss, and the amount is shown by reasonable evidence rather than mathematical precision.

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

Lakeview Outfitters, a retailer in Birmingham, negotiates by phone with Northforge Tools, a seller in Ohio, for 900 pressure washers. The seller's regional director sends a signed internal memo stating that sales representative Evan Pike "has been authorized to sell" the units to Lakeview at $180 each, and the warehouse manager sends a separate signed note assigning promotion code "R7" to "Lakeview special order." An unsigned seller order sheet created the same day lists Lakeview, 900 units, $180 price, Evan Pike, and code R7.

If Northforge later refuses to deliver and argues the agreement is unenforceable under the UCC statute of frauds, which is the best answer?

Explanation. The majority held that separate writings may be integrated to satisfy UCC section 2-201 if they are connected by express reference or internal evidence of unity, connection, or relation. The writing must indicate that a contract for sale has been made, be signed by the party to be charged, and specify quantity. Here, the signed internal memo authorizing the sale, the signed warehouse note, and the unsigned order sheet share the same customer, transaction, and code, so a factfinder could read them together to satisfy the statute of frauds. (Derived from Migerobe, Inc. v. Certina U.S., Inc. (n.d.).)