Court Opinion

ID: 9532239
Source: CourtListenerOpinion
Date Created: 2023-08-07 04:19:29.175148+00
Date Added: 2024-06-11T13:28:42.684406
License: Public Domain

LEESON, J.,
dissenting.
I disagree with the majority’s conclusion that the documents allegedly sent by plaintiffs to L-P were sufficient to satisfy the UCC Statute of Frauds. The majority’s opinion is at odds with courts from other jurisdictions that have ruled on facts similar to those in this case. Regrettably, it creates an “Oregon exception” to the uniformity that is one of the underlying purposes of the UCC. See ORS 71.1020(2)(c).
According to the majority, the forms sent by plaintiffs to L-P are writings in confirmation of a contract because they are labeled “ORDER CONFIRMATION” and because neither “the original” nor “first copy” contains any language “indicating that the parties are in the course of negotiations, that plaintiffs are merely proposing terms or that L-P must approve the terms.” 133 Or App at 642. The majority goes to *643great lengths to describe the layout of those documents. Unfortunately, it does not analyze the import of the words used in them.
The majority’s analysis begins incorrectly by characterizing the two parts of each form sent by plaintiffs to L-P as “the original and first copy.” 133 Or App at 641. (Emphasis supplied.) All pages of the multi-copy form do not contain the same information. The top page plainly informs the prospective buyer that “[a]ll orders accepted subject to strikes * * * [and] other contingencies beyond our power to control” and instructs the buyer to ‘ ‘SIGN CONFIRMATION COPY AND RETURN.” The confirmation copy (second page) provides a signature block for the recipient to comply with the instruction on the top copy:
“ORDER ACCEPTED BY: _
FIRM NAME
SIGNATURE AND TITLE DATE”
Neither page is an “original.” Neither is a “copy” of the other.
ORS 72.2010 is a verbatim enactment of the Statute of Frauds in Article 2 of the UCC. The official commentary to UCC 2-201 indicates that the writing need not be a complete memorial of the contract, as long as it affords a sufficient basis for believing that a contract has been made. Tripp v. Pay ’n Pak Stores, Inc., 268 Or 1, 5, 518 P2d 1298 (1974). ORS 72.2010(2) eliminates the signature requirement when both parties are “merchants.”1 The official commentary explains that failure to answer a written confirmation within 10 days makes the writing sufficient against both parties under subsection (1). Under both subsections (1) and (2), the writing must evidence the existence of an agreement between the parties. Failure to respond to a merchant’s confirming memorandum takes away from the nonresponding merchant the Statute of Frauds defense. To ultimately prevail, however, the sender still must show that an oral contract was in fact made prior to the confirming memorandum. Here, it is not *644necessary to reach the issue of whether an oral contract was formed between the parties, because that contract would be unenforceable absent satisfaction of the Statute of Frauds. UCC § 2-201, comment 3.
The question of whether a writing satisfies the Statute of Frauds is a matter of law, to be determined from an examination of the writing itself.2 R.S. Bennett & Co. v. Economy Mech. Industries, 606 F2d 182, 186 n 4 (7th Cir 1979); Howard Const. Co. v. Jeff-Cole Quarries, Inc., 669 SW2d 221, 230 (Mo App 1983); Bazak Inti Corp v. Mast Indus, 73 NY2d 113, 118, 535 NE2d 633, 635 (1989); Adams v. Petrade Intern., Inc., 754 SW2d 696, 705 (Tex App 1988). That a writing labels itself a “confirmation” is not determinative of whether it satisfies the merchants’ exception. Adams, 754 SW2d at 706. Cases from other jurisdictions have directly addressed the use of a sign-and-return clause in a document that purports to be a “confirmation” under UCC section 2-201(2). In Great Western Sugar Co. v. Lone Star Donut Co., 567 F Supp 340 (ND Tex), aff’d 721 F2d 510 (5th Cir 1983), for example, a sugar merchant brought a breach of contract action, claiming that a writing sent to the buyer, and denominated a “written confirmation,” operated to take the alleged oral contract out of the UCC Statute of Frauds. The writing stated:
“This letter is a written confirmation of our agreement. Please sign and return to me the enclosed counterpart of this letter signalling your acceptance of the above agreement.” 567 F Supp at 342.
That trial court explained that the sugar merchant’s argument concerning the merchants’ exception:
“is at odds with elementary.principles of contract law. By requiring the buyer to take further action in order to signal *645acceptance (signing and returning a copy of the letter agreement), [the seller] indicated to the buyer * * * that the terms quoted were still subject to acceptance or rejection rather than representing a memorialization of an oral contract. A true confirmation requires no response.” Id. (Emphasis supplied.)
The court held that, as a matter of law, the writing was not a “writingin confirmation” under UCC section 2-201(2). Id. at 342-43. The court of appeals affirmed:
“While a mere confirmation without timely objection might have been sufficient under the ‘merchants exception,’ the trial court correctly concluded that, as the master of its offer, [seller], the sender, had the power to require written acceptance as a prerequisite to the formation of a contract. Since it did, and since none was given, no contract arose. ”721 F2d at 510-11. (Emphasis supplied.)
Courts in other jurisdictions have cited Great Western Sugar for the rule that a writing requiring the recipient to take further action by signing and returning a copy to the sender is merely an offer and, therefore, is not a confirmation of a prior oral contract under UCC section 2-201(2). Kline Iron & Steel v. Gray Com. Consultants, Inc., 715 F Supp 135, 142 (D DC 1989); Adams, 754 SW2d at 706; see also R.S. Bennett & Co., 606 F2d at 185-86; Perdue Farms Inc. v. Motts, Inc. of Mississippi, 459 F Supp 7, 15-17 (ND Miss 1978); Howard Const. Co., 669 SW2d at 227; Trilco Terminal v. Prehilt Corp., 167 NJ Super 449, 454-55, 400 A2d 1237, 1240 (Law Division 1979).3
*646Despite being labeled “ORDER CONFIRMATION,” plaintiffs’ forms unambiguously require L-P to sign and return a “confirmation copy” on which it has signified its acceptance. That language indicates that plaintiffs were seeking agreement from L-P in order to form a contract, rather than merely providing confirmation to L-P of a previously concluded oral agreement. The forms require further action by L-P. Consistent with the rule in Great Western Sugar, I would hold that the writings offered by plaintiffs were merely offers to L-P to enter into a contract, and not a confirmation of a prior oral contract between them.
I would reverse the trial court’s ruling that plaintiffs’ forms constitute “writings in confirmation of a contract” under ORS 72.2010(2). Therefore, I would not reach the issues of lost profits and waiver of attorney-client privilege.4
I dissent.

 There is no dispute that all parties are “merchants” under the code. ORS 72.1040(1).

 Plaintiffs contend that the forms satisfy the merchants’ exception, because the “sign and return” clause is “spurious language mostly ignored in the industry” and “absolutely irrelevant to the dealings between the parties.” I would reject plaintiffs’ attempts to explain the meaning of the forms with extrinsic evidence. Permitting parol evidence on this issue undermines the Statute of Frauds by allowing proof of an oral contract to explain a writing that itself is required to prove the existence of the oral contract. Howard Const. Co. v. Jeff-Cole Quarries, Inc., 669 SW2d 221, 230 (Mo App 1983); .R.S. Bennett & Co. v. Economy Mech. Industries, 606 F2d 182, 186 n 4 (7th Cir 1979).

 Plaintiffs cite Bazak Intl Corp for its holding that a buyer’s written confirmation indicating that it was “ONLY AN OFFER AND NOT A CONTRACT UNLESS ACCEPTED IN WRITING BY THE SELLER” was, nevertheless, a writing in confirmation of an oral agreement within UCC section 2-201(2). However, that court acknowledged the general rule and distinguished the case on its peculiar facts. Id. at 123-24, 535 NE2d at 638. Plaintiffs also cite Busby, Inc. v. Smoky Valley Bean, Inc., 767 F Supp 235 (D Kan 1991), for the proposition that highlighting of a “please sign and return” clause by the sender of a writing was insufficient to turn a written confirmation into an offer. In that case, however, the sender’s written confirmation expressly stated that “receipt of this contract by the seller without written notice to v. of objection or error within ten days is an acknowledgment of acceptance.” Id. at 236. The court distinguished both Great Western Sugar and Adams, in which the recipients were required to take further action.
A thorough survey of relevant case law appears in Annot., 82 ALR 4th 709 (1990), including Supp 10-14 (1994).

 I would, however, address plaintiffs’ cross-assignment that the trial court erred in refusing to apply the United Nations Convention on Contracts for the International Sale of Goods (CISG), 15 USCA App (Supp 1994), instead of the UCC. Article 11 of the CISG does not require a contract to be “evidenced by writing” and, thus, would defeat L-P’s statute of frauds defense if the trial court abused its discretion under ORCP 23 B in ruling that plaintiffs’ attempt to raise the CISG was untimely and that they had waived reliance on that theory.