## Facts

- Cargill, an agricultural commodities merchandiser, negotiated by telephone with Van Stafford, who operated a country grain elevator, for two summer 1973 wheat sales.
- July 23, 1973: Stafford discussed selling 40,000 bushels and asked Cargill to send a written confirmation for signature; Cargill sent a confirmation but misaddressed it to a related business (“Stafford Brothers Elevator”), delaying Stafford’s receipt until August 17.
- July 31, 1973: During a later call, Stafford requested a protein premium modification to the July 23 deal (also confirmed in a misdirected writing) and also agreed to an additional sale of 26,000 bushels; Cargill sent a written confirmation for the 26,000-bushel deal correctly addressed to Stafford’s business.
- The written confirmations included a clause giving Cargill an option to cancel.
- After receiving the confirmations, Stafford sent a letter dated August 21 objecting to the cancellation provision and declaring the “contract void.”
- Cargill continued to seek performance; on September 6 Stafford stated he would not perform, and Cargill treated that as refusal to deliver and sought the contract/market differential.
- Wheat prices rose sharply in late July and August; Cargill did not promptly purchase substitute wheat after Stafford’s August 21 letter.

## Issues

1. Whether the July 23 oral agreement was enforceable under the UCC statute of frauds based on Cargill’s written confirmation and Stafford’s objection timing after delayed receipt.
2. Whether a valid, enforceable contract existed for the July 31 26,000-bushel transaction despite Stafford’s later objection to the cancellation clause.
3. Under UCC buyer-remedy provisions, whether damages for the July 31 breach should be measured at repudiation or at the time for performance, and how Cargill’s failure to cover affects that measure.

## Decision

- The court affirmed denial of recovery on the July 23 transaction because the confirmation did not satisfy the statute of frauds against Stafford.
- The court affirmed that the July 31 transaction was a valid and enforceable contract and that Stafford breached it.
- The court remanded on damages for the July 31 transaction for further findings on whether Cargill had a valid reason for not covering and on the proper market-price measure.

## Legal Principles

- Under UCC § 2-201(2), between merchants a written confirmation can satisfy the statute of frauds unless the recipient gives written notice of objection within ten days of receipt; a confirmation received after an unreasonable delay, followed by a timely written objection, does not bind the recipient.
- A merchant’s failure to send a timely written objection to a received confirmation can make the confirmation effective against that merchant for statute-of-frauds purposes even if the merchant later objects to particular terms.
- Under UCC §§ 2-712 and 2-713, a buyer may recover cover damages when it makes a good-faith, reasonable substitute purchase, or alternatively market-price damages measured at the relevant breach time.
- Where a suitable market exists after seller repudiation, the buyer’s recovery may depend on whether it acted commercially reasonably in covering; absent a valid reason for not covering, damages may be measured at repudiation rather than at the time for performance.

## Conclusion

The court held the misdelivered, timely objected-to confirmation did not satisfy the statute of frauds for the July 23 deal, upheld enforcement and breach of the July 31 deal, and remanded to determine whether Cargill’s failure to cover was justified and therefore what UCC market-price date governs damages.


Cargill, Inc. v. Stafford, 553 F.2d 1222 (10th Cir. 1977)