## Facts

- General Trading International, Inc. (GTI) supplied seasonal craft items and negotiated with Wal-Mart Stores, Inc. (Wal-Mart) to sell 250,000 decorative “vine reindeer” for the 1999 Christmas season.
- GTI executed Wal-Mart’s standard vendor agreement requiring written, mutually executed changes; Wal-Mart issued written purchase orders stating quantity and price.
- As shipments arrived in mid-August 1999, Wal-Mart reported serious defects and deemed many reindeer unsuitable for sale.
- Wal-Mart canceled future shipments, later agreeing to purchase already-manufactured units at a discount while proposing to withhold funds for defects and markdowns.
- Wal-Mart asserted GTI orally agreed to a total $600,000 withholding: $400,000 for defective-merchandise claims plus an additional $200,000 price reduction for markdowns.
- Wal-Mart’s buyer emailed that the reserve would be changed to $600,000 and later stated $600,000 was on hold, allocating $200,000 to markdowns and $400,000 to defect claims.
- GTI demanded payment of the full balance, then stated in writing it would accept only a $400,000 withholding and characterized that position as non-negotiable.
- GTI sued in federal district court (W.D. Ark.) for breach of contract and related payment claims; Wal-Mart counterclaimed for breach of contract and fraud.
- The district court granted GTI partial summary judgment for the disputed $200,000, holding the alleged oral markdown agreement unenforceable under the UCC statute of frauds; a jury later awarded GTI $63,280 on remaining issues.
- The district court denied Wal-Mart’s motion for judgment as a matter of law or a new trial and denied GTI’s request for attorney’s fees; Wal-Mart appealed and GTI cross-appealed.

## Issues

1. Whether an alleged oral agreement modifying the contract price by a $200,000 markdown was unenforceable under UCC § 2-201 as adopted in Arkansas.
2. Whether Wal-Mart’s emails satisfied the UCC § 2-201(2) merchants’ confirmatory-memo exception, and whether GTI’s writings constituted timely objections.
3. Whether the district court abused its discretion in denying Wal-Mart a new trial.
4. Whether the district court abused its discretion in denying GTI attorney’s fees under Arkansas law.

## Decision

- The Eighth Circuit affirmed the partial summary judgment requiring Wal-Mart to pay the disputed $200,000, holding the alleged oral markdown modification was barred by the statute of frauds.
- The court held Wal-Mart’s emails did not qualify as sufficient confirmatory memoranda of a prior mutual agreement on the $200,000 markdown and, in any event, GTI’s written responses were timely objections.
- The court affirmed denial of Wal-Mart’s motion for a new trial, finding no abuse of discretion.
- The court affirmed denial of attorney’s fees to GTI, concluding the district court acted within its discretion under Arkansas law.

## Legal Principles

- Under UCC § 2-201, a contract for the sale of goods over $500, including a modification affecting the price term, is unenforceable absent a writing sufficient to indicate a contract between the parties.
- UCC § 2-201(2) allows enforcement between merchants based on a confirmatory writing received and not objected to in writing within ten days, but the writing must reflect a prior agreement rather than an ongoing proposal or unilateral position.
- A recipient’s written demand for full payment and written rejection of an asserted price reduction can constitute a timely objection defeating reliance on the merchants’ exception.
- Denial of a new trial is reviewed for abuse of discretion; an appellant must show prejudicial error affecting the verdict.
- Attorney’s fees under applicable Arkansas law in this context were discretionary; denial is reviewed for abuse of discretion.

## Conclusion

The Eighth Circuit held that Wal-Mart could not enforce an alleged oral $200,000 markdown because the UCC statute of frauds required a sufficient writing, Wal-Mart’s emails did not establish a prior mutual agreement, and GTI’s written communications timely objected; the court also upheld the denial of a new trial and attorney’s fees.


General Trading Int'l, Inc. v. Wal-Mart Stores, Inc., 320 F.3d 831 (8th Cir. 2003)