## Facts

- Costco agreed to buy 2,080 boxes of jewelry from World Wide Licensing Corp. for $74,880 and paid by check under a written sales contract.
- An independent sales agent, Loren Coleman, handled dealings between Costco and World Wide.
- After Costco suggested the jewelry might sell quickly, Coleman recommended that World Wide produce an additional 1,248 boxes; Costco was not informed of this extra production.
- Costco complained that the delivered jewelry was low quality.
- World Wide instructed Coleman to offer Costco an $8-per-box rebate on the 2,080 boxes, allegedly conditioned on Costco buying the additional 1,248 boxes.
- Costco asserted Coleman provided a writing reflecting the $8-per-box rebate as a modification of the original contract price and sued for $16,640 when World Wide refused to pay.
- World Wide denied an unconditional rebate agreement, asserted the UCC statute of frauds, and claimed Costco’s rebate entitlement depended on an oral promise to purchase the additional boxes.

## Issues

1. Whether an $8-per-box rebate on goods already covered by a written sales contract satisfied the UCC statute of frauds as an enforceable modification.
2. Whether Costco’s alleged oral promise to purchase an additional 1,248 boxes was enforceable under the UCC statute of frauds.
3. Whether genuine issues of material fact existed regarding Coleman’s actual or apparent authority to bind World Wide to an unconditional rebate, making summary judgment improper.

## Decision

- The court held the UCC statute of frauds did not bar treating the rebate as a price modification tied to the original written contract.
- The court held any alleged oral agreement by Costco to purchase the additional 1,248 boxes was unenforceable under the UCC statute of frauds absent a sufficient writing.
- The court reversed summary judgment for Costco because material factual disputes remained about Coleman’s authority (actual or apparent) and the terms on which any rebate was offered.
- The case was remanded for further proceedings.

## Legal Principles

- A written sales contract that satisfies UCC § 2-201 may permit enforcement of a related price modification without treating the modification as a wholly separate contract for statute-of-frauds purposes.
- An oral agreement for the sale of additional goods above the UCC statute-of-frauds threshold is unenforceable without a writing signed by the party to be charged (absent an applicable exception).
- Apparent authority turns on the principal’s manifestations to the third party and the third party’s reasonable belief; when evidence on those manifestations is disputed, authority is a fact question not suitable for summary judgment.

## Conclusion

The appellate court concluded the rebate could qualify as a modification not barred by the statute of frauds, but reversed because unresolved factual disputes about the agent’s authority and the rebate’s conditions required a fact-finder, and any alleged oral commitment to buy additional jewelry was unenforceable without a sufficient writing.


Costco Wholesale Corp. v. World Wide Licensing Corp., 78 Wash. App. 637, 898 P.2d 347 (Wash. Ct. App. 1995)