## Facts

- Scoular Company bought and resold millet; Doug Denney farmed millet and previously made both spot sales and forward contracts with Scoular.
- On May 30, 2002, Denney and Scoular discussed a forward contract for 15,000 bushels of millet; Denney indicated he wanted $5 per hundredweight, and Scoular stated that price was not then available.
- Four days later, Scoular, relying on Denney’s stated price, entered a resale contract with a third-party buyer at a price sufficient to pay Denney $5 per hundredweight.
- Scoular’s general manager attempted to contact Denney; Denney was unavailable while farming.
- On June 27, 2002, the general manager spoke with Denney by phone and then mailed Denney a written, signed purchase contract.
- Denney did not sign or return the writing, did not timely review his mail, and later sold the harvested millet to another grain operator after the market price rose substantially.
- Scoular sued for breach of contract, promissory estoppel, and unjust enrichment; Denney counterclaimed for conversion relating to wheat stored with Scoular.
- After a bench trial, the trial court found an enforceable contract at $5 per hundredweight and awarded Scoular damages, then offset Denney’s conversion recovery and entered a net judgment for Scoular.
- Denney appealed, disputing contract formation, acceptance, and enforceability under the UCC statute of frauds.

## Issues

1. Whether Scoular’s resale contract with a third party, made in reliance on Denney’s oral offer, constituted acceptance sufficient to form a contract.
2. Whether the parties formed a binding oral contract during the June 27, 2002 telephone conversation, including whether any acceptance occurred within a reasonable time and before revocation.
3. If an oral contract was formed, whether it was enforceable under the UCC statute of frauds, including the merchant-confirmation exception despite Denney’s failure to sign or return Scoular’s written confirmation.

## Decision

- The Colorado Court of Appeals reversed the judgment for Scoular and remanded.
- The court held that Scoular’s resale to a third party did not, by itself, constitute acceptance of Denney’s offer.
- The court directed the trial court to make further findings on whether acceptance occurred during the June 27 phone call (or otherwise), whether acceptance was timely and before any revocation, and whether any resulting contract was enforceable under the UCC statute of frauds and the merchant-confirmation rule.

## Legal Principles

- An offer is not accepted unless the offeree manifests assent through communication or conduct that clearly indicates an intent to be bound by the offer’s terms.
- A buyer’s separate downstream resale transaction, without communication to the seller, does not constitute acceptance of the seller’s offer.
- For sales of goods covered by the UCC statute of frauds, enforceability generally requires a writing signed by the party to be charged, subject to statutory exceptions.
- Under the UCC merchant-confirmation exception, an oral contract between merchants may be enforceable if one party sends a sufficient written confirmation and the recipient fails to object within a reasonable time; application depends on a predicate finding that an oral contract was actually formed.

## Conclusion

The appellate court rejected the trial court’s reliance on Scoular’s third-party resale as acceptance, and remanded for factual findings on whether the parties reached an oral agreement (particularly during the June 27 call), whether any acceptance preceded revocation and occurred within a reasonable time, and whether the UCC statute of frauds was satisfied through the merchant-confirmation exception.


Scoular Co. v. Denney, 151 P.3d 615 (Colo. App. 2006)