Court Opinion

ID: 9531808
Source: CourtListenerOpinion
Date Created: 2023-08-07 04:14:42.637512+00
Date Added: 2024-06-11T13:28:35.169289
License: Public Domain

SUNDBY, J.
(dissenting). I have no quarrel with the majority’s statement of the applicable contract principles. I believe, however, that the parties entered into a binding contract.
*625The majority does not attach sufficient significance to the previous dealings between the parties.1 In June 1986 Kenneth Fenton, representing Apex, telephoned James Lager, representing Mathy Construction, and inquired as to a possible sale by Apex to Mathy of liquid asphalt. On June 13, 1986, in a telephone conversation with Lager, Apex, through Fenton, agreed to sell to Mathy 120-159 pen grade asphalt, subject to credit approval. The parties had the capability of communicating by QWIP Facsimile *626(FAX), a process of transmitting a document by telephone. Fenton sent a FAX to Lager at Mathy confirming their tentative agreement.
After obtaining credit approval, Fenton sent another FAX to Lager at Mathy stating that Apex agreed to sell and Mathy agreed to buy 30,000 barrels of 120-150 pen grade asphalt F.O.B. Wood River, Illinois. F.O.B. means, of course, "free on board,” or "without charge to the buyer for goods placed on board a carrier at the point of shipment.” The Random House Dictionary of the English Language 742 (2d ed. unabridged 1987). F.O.B. refers to the place where the buyer is going to take possession of the product. The sales agreement which confirmed the FAX sale stated that delivery was to be to the barge "Ingram,” Wood River, Illinois. There is no dispute that Mathy contracted for the barge or that it was Mathy’s responsibility to arrange for the barge to pick up the second order.
Fenton testified that the parties did not attach any significance to the fact that the contract of June 24, 1986 was memorialized in a written sales agreement which was sent by mail. In fact, Mathy paid for the asphalt before it received the written sales agreement.
Thereafter, on July 14 or 15,1986, Lager contacted Fenton by telephone about the purchase of additional 120-150 pen grade asphalt. The parties followed the same procedure as before. On July 16,1986 Fenton sent to Lager a FAX communication confirming their July 16, 1986 sales agreement under which Apex agreed to sell and Mathy agreed to buy 30,000 barrels of 120-150 pen asphalt F.O.B. Wood River, Illinois, for delivery between July 30 and August 4, 1986. This FAX agreement provided, however, that Mathy was to *627give Apex seven days notice if the pen grade was to be changed to 85-100 pen. As before, Fenton sent a written sales agreement by ordinary mail to Mathy. Mathy, however, did not return the sales agreement. When Apex did not receive notice that Mathy wished to change the pen grade to 85-100, Apex proceeded to manufacture the 30,000 barrels of 120-150 pen grade asphalt. Fenton testified that Mathy purchased in 30,000 barrel quantities because that was all that the Ingram barges Mathy used could handle.
About July 20 or 21, 1986, Fenton telephoned Lager and inquired as to when Mathy intended to "lift” the asphalt. At that time Lager told Fenton it would be around August 1, 1986. In a later telephone conversation Lager told Fenton that the barge was not going to make it until approximately August 10 or 11. When Fenton did not receive instructions from Lager relative to delivery of the asphalt, he communicated by FAX to Lager on August 5,1986 as follows: "Please advise of your barge nomination for lifting of your 150 pen grade material out of Wood River, IL. Per our last conversation on 7/31/86, you indicated that you were using Ingrams barge for a lifting of 8/10/-11/86.”
In none of these conversations did Lager deny that a contractual relationship existed between Mathy and Apex, nor did he state any intention of changing the pen grade of the asphalt.
Fenton again telephoned Lager on August 7 to get a barge nomination. Again, Lager gave no indication that Mathy would not nominate a barge and pick up the asphalt.
On August 7, 1986 Fenton sent another FAX communication to Lager referring to "our July 16, 1986 Purchase/Sales Agreement” and requesting a *628barge nomination. On August 8, Lager sent the following letter to Fenton:
As I informed you during our telephone conversations of [July] 30 and August 6, the availability of a barge to lift the A.C. 120/150 pen. is still in doubt. Additionally, I informed you we had not yet concluded we would need 120/150, possibly, we would want an 85/100 pen. or a vis. grade material for exchange purposes.
The timing of this anticipated shipment is still contingent on the above options.
The deadline for Mathy to give Apex notice if it desired a change in pen grade had, however, expired June 23, 1986.
On August 15,1986, Lager, for the first time, told Fenton that they did not have a deal and that the confirmation/written sales agreement was merely a proposal.
Lager testified that with respect to the first sale, he had made arrangements for the barge. He admitted that it was not a condition of sale that Mathy be able to obtain a barge. He testified: "It was a foregone conclusion on my part, at least, no boat, no oil.” There is no evidence, however, that Lager’s "foregone conclusion” was ever communicated to Apex. Lager testified: "I don’t know as if I specifically outlined to Ken [Fenton] verbatim, that we wouldn’t take it if we didn’t have, but that’s — it’s just a conclusion you have to draw on this business that you must have transportation to prove product.” He also testified: "[I]f I can’t provide my own transportation, I obviously can’t perform the contract.” If Mathy intended to rely on a trade usage, that the buyer did not have to perform if it could not nominate a barge, Mathy was required to *629show that Apex understood that usage; Knobel v. J. Bartel Co., 176 Wis. 393, 398, 187 N.W. 188, 189-90 (1922).
On these facts, which are undisputed, I conclude that there was a meeting of the minds and a binding contract. Therefore, I respectfully dissent.

The majority opinion correctly notes that under sec. 402.208(1), Stats., a single occasion of conduct does not constitute a "course of performance” which is relevant to determine the meaning of an agreement. Official UCC Comment, sec. 4, W.S.A. sec. 402.208 (1964). I do not suggest reliance on a "course of performance.” The crucial question in this case involves a usage of trade — responsibility to nominate a barge — which can be shown without proof of a prior course of dealing. Sec. 401.205, Stats. I suggest reference to the previous contract between the parties simply to show that Mathy intended, according to trade usage, when it agreed to buy Apex’s asphalt "F.O.B. Wood River, Illinois” that it would supply and nominate a barge to pick up its order.
In a decision which appears to have been codified in sec. 401.205, Stats., Scaramelli & Co., Inc. v. Courteen Seed Co., 194 Wis. 520, 217 N.W. 298 (1928), the parties had contracted but once previously. Nevertheless, the defendant was allowed to show that it was the general custom to ship seeds by vessel sailing directly from the port of exportation to the port of importation. The court said: "The custom certainly appears to be a reasonable one and does not vary the terms of the written contract, but merely supplements it by incorporating in its matters of general custom well understood by both parties and with reference to which it must be presumed the contract was made.” Id. at 526, 217 N.W. at 300 (citations omitted). The testimony of Mathy’s representative, James Lager, established that it knew that "F.O.B. Wood River, Illinois” required that it provide transportation by barge.
There is no question of admissibility of evidence of this usage because Mathy’s representative testified to it.