## Facts

- J.D. Fields & Company, Inc. (Fields) distributed steel products and regularly purchased steel from United States Steel International, Inc. (USSI).
- From 2003–2008, Fields bought steel from USSI in at least 30 transactions totaling over $19.9 million.
- USSI described the parties’ usual sequence as: Fields request for quotation → USSI price quotation → Fields purchase order → USSI order acknowledgment → shipment and invoice; Fields disputed that acknowledgments were consistently provided.
- Fields sued over two 2008 steel pipe transactions in which USSI did not ship product and did not send acknowledgments.
- Transaction 1 (Purchase Order 45850):
  - Fields requested price and delivery options for a specified pipe amount.
  - USSI issued a quotation stating a price but requiring a minimum order of 100 metric tons.
  - Fields sent a purchase order for approximately 60 tons and never issued a revised purchase order meeting the minimum.
  - USSI never sent an order acknowledgment and never shipped.
- Transaction 2 (Purchase Order 46110):
  - USSI issued a detailed written quotation specifying goods, price, quantity, delivery timeframe, and an expiration date.
  - Fields sent a purchase order matching the quotation.
  - USSI did not send an order acknowledgment and did not deliver.
- USSI counterclaimed on a third transaction, asserting Fields breached by refusing to accept and pay for pipe that USSI shipped.

## Issues

1. Whether USSI’s price quotations were offers capable of acceptance by Fields’ purchase orders under Texas law and UCC sales principles.
2. Whether the parties’ course of dealing required an order acknowledgment as a condition to contract formation.
3. Whether Fields produced sufficient evidence to avoid summary judgment on promissory estoppel and fraud-based theories tied to the failed deliveries.
4. Whether the district court could grant summary judgment sua sponte against Fields on fraudulent inducement without notice and an opportunity to respond.

## Decision

- The Fifth Circuit affirmed summary judgment that no contract was formed for Transaction 1 (PO 45850) because the quotation’s 100-ton minimum made Fields’ nonconforming purchase order ineffective as an acceptance.
- The Fifth Circuit reversed summary judgment on the breach-of-contract claim for Transaction 2 (PO 46110), holding the detailed quotation could be construed as an offer and Fields’ purchase order could be construed as an acceptance, creating a genuine dispute of material fact.
- The Fifth Circuit reversed the district court’s sua sponte summary judgment on fraudulent inducement due to lack of required notice and time to respond.
- The case was remanded for further proceedings on the revived claims.

## Legal Principles

- A price quotation is generally an invitation to negotiate, but it may constitute an offer if it is sufficiently definite and shows intent to be bound upon acceptance.
- A quotation conditioned on a material term (e.g., a minimum quantity) is not accepted by a purchase order that does not conform to that condition; the nonconforming purchase order functions as a counteroffer.
- Course of dealing may inform whether a quotation was intended as an offer, but it does not necessarily resolve intent as a matter of law at the summary-judgment stage when competing inferences exist.
- A court’s sua sponte entry of summary judgment must comply with Rule 56 notice requirements by providing the adverse party notice and a reasonable time to respond.

## Conclusion

The Fifth Circuit treated the first, minimum-quantity quotation as non-offer/non-acceptance as a matter of law, but held the second, detailed quotation could support contract formation and required trial-level factfinding, while also requiring reversal where summary judgment was entered sua sponte on fraudulent inducement without proper procedural notice.


J.D. Fields & Co. v. U.S. Steel Int’l, Inc., 426 F. App’x 271 (5th Cir. 2011)