## Facts

- A textile broker arranged seven 1981 sales of fabric from a seller to a buyer, and sent identical written “sales notes” to both parties for each transaction.
- Each sales note stated the material terms and included an arbitration clause calling for arbitration under an industry arbitral forum.
- The sales notes stated that duplicate copies were sent to both parties and that acknowledgment by either party would bind both unless written objection was made within ten days.
- Five earlier transactions were completed or mutually cancelled without dispute; the buyer retained the sales notes for those transactions without objecting to the arbitration provision.
- The dispute arose when the buyer refused to pay for fabric shipped under two later sales notes, claiming the goods were defective.
- The seller demanded arbitration based on the arbitration clauses in the two disputed sales notes.
- The buyer petitioned to stay arbitration, arguing there was no agreement to arbitrate because the arbitration clause appeared only on the broker’s sales notes and was not expressly signed or negotiated.
- The seller submitted affidavits (including from brokers) describing trade practice that broker sales notes confirm oral deals and routinely include arbitration clauses; the buyer offered no affidavits rebutting this trade-usage showing.

## Issues

1. Whether retention without timely objection of broker-issued sales notes containing an arbitration clause can constitute a written agreement to arbitrate between merchant parties.
2. Whether evidence of trade usage and a prior course of dealing may establish assent to arbitration terms included in broker confirmations.
3. Whether New York’s requirement of a “written agreement” to arbitrate is satisfied by broker confirmations ratified by the parties’ conduct.

## Decision

- The Appellate Division reversed the order staying arbitration and dismissed the buyer’s petition.
- The court held that the broker’s sales notes, coupled with the buyer’s retention without objection and the demonstrated trade practice, established a binding written agreement to arbitrate.
- Arbitration was permitted to proceed under the forum specified in the sales notes.
- The Court of Appeals later affirmed the Appellate Division’s determination.

## Legal Principles

- A party may be bound to an arbitration clause contained in a broker’s confirmation when the party retains the confirmation without timely objection, thereby ratifying the broker’s authority and the reported terms.
- In merchant transactions, trade usage and prior course of dealing may be used to show that standard terms in broker confirmations are part of the parties’ contract.
- The statutory requirement that an arbitration agreement be “written” can be satisfied by written broker confirmations that memorialize an oral agreement, where objective conduct shows assent to the stated terms.

## Conclusion

The court enforced arbitration because the broker’s written sales notes served as the contract memorial and, given unrebutted evidence of trade practice and the parties’ prior dealings, the buyer’s retention of the notes without timely objection constituted assent to the arbitration provision.


Woodcrest Fabrics, Inc. v. B & R Textile Corp., 95 A.D.2d 656, 464 N.Y.S.2d 359 (N.Y. App. Div. 1st Dep’t 1983)