Facts
- Bazak International Corp. (buyer), a textile merchant, and Mast Industries, Inc. (seller), also a textile merchant, negotiated an oral sale of close-out textiles for $103,330.
- The parties allegedly agreed on all terms by April 23, 1987, and Mast indicated invoices and delivery would follow.
- At Mast’s request, on April 30, 1987 Bazak faxed five signed purchase orders to Mast’s office; the fifth summarized the orders and stated the total price.
- Mast confirmed receipt of the purchase orders in writing, retained them, and did not send any written objection to their contents.
- Mast never delivered the goods despite Bazak’s demands.
- Bazak’s purchase order forms contained boilerplate stating they were “only offers” and not binding absent written acceptance, but the clause was drafted for transactions where Bazak was the seller.
Issues
- Whether, between merchants, buyer-signed purchase orders sent after an alleged oral agreement and retained by the seller without written objection can constitute “writings in confirmation of the contract” under UCC § 2-201(2), satisfying the Statute of Frauds against the seller.
- Whether dismissal at the pleading stage was proper where the merchant’s exception could apply and the buyer alleged facts supporting an oral contract and confirmatory writings.
Decision
- The Court of Appeals reversed the Appellate Division and reinstated the complaint as to the contract claim.
- The court held that the purchase orders could qualify as confirmatory writings under UCC § 2-201(2) despite the absence of the seller’s signature.
- The court rejected the argument that the purchase orders were ineffective confirmations due to the printed “offer only” boilerplate.
- The court held it was error to dismiss on Statute of Frauds grounds without allowing Bazak to attempt to prove the existence of the alleged oral contract.
Legal Principles
- Under UCC § 2-201(2), between merchants, a writing that confirms a contract and is sufficient against the sender satisfies the Statute of Frauds against the recipient unless the recipient sends written objection within ten days.
- A confirmatory writing need not contain explicit “words of confirmation”; it is enough that, in context, it indicates a contract for sale has been made and states essential terms with reasonable certainty.
- A buyer-generated purchase order can serve as a confirmatory writing if it is signed by the sender and would be enforceable against the sender under UCC § 2-201(1).
- A merchant’s receipt and retention of a qualifying confirmation without timely written objection can preclude a Statute of Frauds defense, subject to proof that an oral agreement was actually reached.
- Boilerplate on a form may be disregarded where its evident purpose and context show it does not govern the transaction at issue.
Conclusion
Between merchants, signed purchase orders that reflect an alleged oral agreement and are kept by the recipient merchant without timely written objection may satisfy UCC § 2-201(2), making dismissal on Statute of Frauds grounds improper at the pleading stage.