## Facts

- Brookside Farms supplied fresh basil; Mama Rizzo’s, Inc. (MRI) bought basil for use in its products.
- The parties executed a one-year written requirements contract under which MRI agreed to buy at least 91,000 pounds of basil, delivered five days per week in daily lots of 350–800 pounds.
- The contract set seasonal prices: $3.80/lb during the domestic growing season (June 1–Sept. 30) and $5.00/lb during the non-growing season (Oct. 1–May 31), and required payment within 15 days of delivery for accepted basil.
- The contract included a clause prohibiting oral modifications.
- After signing, MRI requested added processing (removal of additional stem portions). Brookside agreed in exchange for a $0.50/lb increase for the remainder of the contract term.
- Although the written contract was not formally updated, MRI issued purchase orders reflecting the higher price, Brookside invoiced at the higher price, and MRI paid those invoices without objection for multiple orders.
- MRI later stopped ordering basil for several weeks, after which the parties made additional oral price changes; Brookside filled numerous purchase orders at those modified prices and MRI paid without objection.
- MRI then issued 21 purchase orders (about 3,041 pounds). Brookside shipped and invoiced at the modified prices; MRI accepted the basil but did not pay because its check was dishonored for insufficient funds.
- Brookside sued for payment on the unpaid orders and for damages based on MRI’s alleged failure to meet the minimum purchase obligation; MRI denied liability and counterclaimed for alleged overpayments, asserting the price increases were invalid under the no-oral-modification clause and the statute of frauds.

## Issues

1. Whether oral price and performance modifications to a written goods contract containing a no-oral-modification clause were enforceable under UCC § 2-209 and the statute of frauds.
2. Whether MRI’s repeated issuance of purchase orders at modified prices, acceptance of deliveries, and payment of invoices constituted waiver or course of performance making the modifications enforceable.
3. Whether MRI, having accepted the basil shipped under the last 21 purchase orders, was obligated to pay the modified contract price, and whether MRI could recover alleged overpayments on a breach theory.

## Decision

- MRI’s motion for summary judgment was denied in full.
- Brookside’s motion for partial summary judgment was granted in part and denied in part.
- The court held the oral modifications were enforceable as applied to transactions performed under the modified terms, notwithstanding the no-oral-modification clause and statute-of-frauds objections.
- The court held MRI was liable for payment for basil it accepted but did not pay for under the 21 unpaid purchase orders.
- The court rejected MRI’s counterclaim seeking restitution of alleged overpayments based on the asserted invalidity of the price increases.
- The court did not grant Brookside complete summary judgment on all claimed damages tied to the minimum-quantity obligation, leaving remaining issues for further proceedings.

## Legal Principles

- Under UCC § 2-209, contract modifications for the sale of goods may be enforced based on the parties’ conduct, including waiver of a contractual requirement that modifications be in writing.
- The statute of frauds does not bar enforcement of an oral modification as to goods that have been received and accepted; acceptance supports enforcement for those performed transactions.
- Course of performance—such as repeated purchase orders, invoicing, and payment at modified prices—can establish mutual assent to modified terms and defeat later attempts to invoke a no-oral-modification clause for those transactions.
- A buyer that accepts goods must pay for them at the applicable contract price; when an enforceable modification governs the parties’ performed transactions, the modified price controls.
- A buyer generally cannot recoup amounts paid under an established course of performance by later characterizing agreed and performed price changes as unilateral breaches.

## Conclusion

The court enforced the parties’ orally implemented price and performance changes under the UCC where MRI’s course of performance showed waiver and assent, and it required MRI to pay for accepted but unpaid basil while denying MRI’s effort to treat the price increases as invalid and recover alleged overpayments.


Brookside Farms v. Mama Rizzo’s, Inc., 873 F. Supp. 1029 (S.D. Tex. 1995)