Facts
- The Leonard Pevar Company (Pevar), a contractor supplying buildings to the State of Pennsylvania, sought medium density overlay (MDO) plywood for its construction work and requested price quotations from several manufacturers.
- Evans Products Co. (Evans) provided the lowest quoted price. Pevar’s representative spoke by telephone with Evans’ representative (Kenneth Kruger) during the quotation process, including a call on October 12, 1977.
- Pevar claimed that during a second telephone call on October 14, 1977, it placed an order and the parties formed an oral contract for the sale of the plywood; Evans admitted the call occurred but denied accepting an order or entering an oral sales contract on that call.
- After the October 14 call, Pevar sent Evans a written purchase order specifying the price, quantity, and shipping instructions; the purchase order did not address warranties or buyer remedies.
- On October 19, 1977, Evans sent Pevar a written acknowledgment. On the reverse side, in boilerplate language, Evans stated that the existence of a sales contract was expressly contingent on Pevar’s acceptance of all terms in the acknowledgment, including disclaimers of most warranties and a limitation on the buyer’s remedies if the plywood proved defective.
- Evans shipped the plywood, and Pevar accepted delivery and paid.
- Pevar later alleged the plywood was defective and sued Evans for breach of express and implied warranties. Evans denied liability, asserting that its acknowledgment disclaimed warranties and limited liability as part of the parties’ contract.
- The case was brought in federal court under diversity jurisdiction, and both parties moved for summary judgment.
Issues
- Whether the parties formed an enforceable sales contract during the disputed October 14, 1977 telephone call, or instead formed a contract through later writings or conduct.
- Whether Evans’ acknowledgment operated as a counteroffer expressly conditioning contract formation on Pevar’s assent to the acknowledgment’s boilerplate terms, or as a written confirmation governed by U.C.C. § 2-207.
- If U.C.C. § 2-207 applies, whether the warranty disclaimers and remedy limitations in Evans’ acknowledgment became part of the contract between merchants, including whether those terms materially changed the parties’ agreement.
- Whether the statute of frauds for the sale of goods barred enforcement of any alleged oral contract, and whether the exchanged writings (including Pevar’s purchase order) satisfied U.C.C. § 2-201, including the merchant-confirmation and ten-day objection concepts.
- Whether a contract existed by the parties’ conduct under U.C.C. § 2-207(3) even if the writings did not establish a contract, and if so, what terms governed.
Decision
- The court denied both parties’ motions for summary judgment.
- A genuine dispute of material fact existed as to whether Evans accepted an order and formed an oral contract with Pevar during the October 14, 1977 call.
- Because formation and timing were disputed, the court could not decide as a matter of law whether Evans’ acknowledgment was a confirmation with additional terms under U.C.C. § 2-207(2) or a conditional counteroffer requiring assent to the boilerplate terms.
- The court also could not resolve on summary judgment whether the boilerplate warranty disclaimers and remedy limitations became part of the parties’ agreement, including whether they materially changed the bargain.
- The statute-of-frauds arguments likewise could not be resolved on the summary-judgment record because they turned on the same disputed questions about whether, and when, the parties reached agreement and how the writings functioned.
- The parties’ shipment, acceptance, and payment raised the possibility of a contract by conduct under U.C.C. § 2-207(3), but factual disputes prevented summary judgment on that theory and on the governing terms.
Legal Principles
- Summary judgment must be denied when material facts are genuinely disputed, including facts about whether and when a contract was formed and what the parties agreed to.
- U.C.C. § 2-207 applies to transactions where parties exchange forms with different terms and may address (a) written confirmations of prior oral agreements, (b) purported acceptances containing additional or different terms, and (c) contracts shown by conduct even when writings do not establish a contract.
- Whether a seller’s acknowledgment that “expressly conditions” the deal on assent to its boilerplate terms is a valid acceptance/confirmation or instead a counteroffer can depend on disputed facts about formation and assent.
- Under U.C.C. § 2-207(2), additional terms between merchants may or may not become part of the contract; whether warranty disclaimers and remedy limitations materially change the agreement can require fact findings.
- Under U.C.C. § 2-201, the statute of frauds for the sale of goods may be satisfied by a writing sufficient to indicate a contract, including certain merchant-to-merchant confirmatory memoranda when no timely objection is made, but whether a writing serves that role can depend on disputed formation facts.
Conclusion
Leonard Pevar Co. v. Evans Products Co. denied cross-motions for summary judgment because the record contained genuine disputes about whether an October 14, 1977 phone call created an oral sales contract, how the parties’ later purchase order and acknowledgment fit within U.C.C. § 2-207, whether Evans’ boilerplate warranty disclaimers and remedy limitations became contract terms, and whether the statute of frauds and contract-by-conduct rules applied; those questions required resolution of contested facts rather than a ruling as a matter of law.