Court Opinion

ID: 9460076
Source: CourtListenerOpinion
Date Created: 2023-08-04 21:40:06.682599+00
Date Added: 2024-06-11T17:36:27.707656
License: Public Domain

GARTH, .Circuit Judge
(concurring):
I agree with the majority that the presence of unresolved factual issues preclude the grant of summary judgment. However, I do not agree with a major portion of the majority’s analysis leading to that conclusion. Our disagreement centers upon our respective interpretations of a section of the Uniform Commercial Code adopted by Pennsylvania (12A P.S. § 2-209 Section (4)). My research discloses that that section has not been authoritatively interpreted in Pennsylvania or in any other jurisdiction and, accordingly, I feel that an exposition of our different views is warranted, despite the fact that we ultimately reach the same result in terms of the instant case.
An essential predicate for the conclusion reached by the majority is that the term “waiver”, as used in § 2-209(4), means “waiver of the Statute of Frauds” (See footnote 4 of the majority opinion: “Thus, we have concluded that the language of sub-section (4) refers, in this case, to an oral waiver of the operation of the Statute of Frauds . . . ”). In effect, the majority opinion holds that although an attempt to modify the March 24, 1971 written agreement did not succeed (as the modification was not in writing), it nevertheless operated as a complete waiver in toto of the Statute of Frauds.
I cannot agree that § 2-209(4) is to be read in that fashion. Rather it is my view that the “waiver” to which § 2-209(4) refers is a waiver limited to the particular condition, term or portion of the written contract sought to be waived by a party entitled to waive it. It does not constitute nor operate as a wholesale waiver of the Statute of Frauds.1 Hence, a much narrower reading of this section is required than that given to it by the majority. I understand the majority to be saying that oral modifications may always be viewed as enforceable waivers of the Statute of Frauds. Such a construction would render meaningless the direction of § 2-209(3) that the Statute of Frauds must be satisfied “if the contract as modified is within its provisions.” Under my interpretation of § 2-209(4), after there has been an unsuccessful oral modification, a party entitled to waive a provision can waive *299that provision by agreeing to an oral modification, but obviously no new or affirmative term can be substituted therefor without satisfaction of the Statute of Frauds.
Any new or affirmative term may or may not be subject to enforcement2 or may or may not be resisted by the other party. The question of the operative quality of a substituted affirmative term or provision does not concern us here, but is rather left to the operation of the Statute of Frauds (2-201) and to the particular construction to be accorded that situation when it arises.3
I suggest that under the majority view, once there has been an oral attempt to alter a written agreement, there could be no writing or Statute of Frauds requirement imposed thereafter on the parties, as once the Statute of Frauds has been waived, all other subsequent modifications would mot require a writing. This, I suggest, could not have been the intention of the drafters of the Code.
Furthermore, if § 2-209(4) is to be read as the majority would have us read it, we would be obliged to ascribe one meaning to the term “waiver” as it is used in § 2-209(4) and another meaning to that term as it is used in § 2-209(5). I cannot believe that the drafters of the Uniform Commercial Code intended any such anomalous result, particularly when it is noted that § 2-209(5) refers to a waiver “affecting an executory portion of the contract . ” and provides that “strict performance will be required of any term 4 waived. . . . ”
One last observation: the Comment under 12A P.S. § 2-209(4) refers to the Restatement of Contracts, Section 224.5 Nothing in that section would lead to the conclusion that the Statute of Frauds can be waived in toto. Instead, the examples and the text of that section suggest that a more restrictive type of waiver is contemplated.6
Within the context of the instant ease, the Girard Bank, by having agreed to the oral modification of the written eon-*300tract (which written contract included a provision granting the bank an option to terminate the contract at any time up to and including April 1, 1971), waived its option provision when it acceded to the oral agreement of March 31, 1971. The question remains as to whether its [Gir-ard’s] retraction of that waiver was effective and whether it met the requirements of 12A P.S. § 2-209(5). That is a matter for the fact finder, and I agree with the majority that on this record summary judgment is not available to resolve that issue. I therefore concur in vacating the judgment of the district court and in remanding the cause for further proceedings.

. In my view, that section may be paraphrased to read as follows: “(4). Although an attempt at modification or rescission does not satisfy the requirement of sub-section (2) or (3) it can operate as a waiver of the particular condition, term or portion of the written contract sought to be waived.”

. 12A P.S. § 2-201(1) provides that:
“Except as otherwise provided in this section a contract for the sale of goods for the price of $500. or more is not enforceable bp wap of action, or defense unless there is some writing sufficient to indicate that a eontraet for sale has been made between the parties and signed by the party against whom enforcement is sought. . . . ” (Emphasis supplied)

. It is of interest to note that the terms of the modification to which appellant had agreed would, as a practical matter, not be called into issue by the appellant.
If sought to be enforced by the appellee bank, there was a letter agreement (memorandum) prepared and signed by the appellant (the party to be charged) satisfying the requirements of the Statute of Frauds. However, this is an issue we need not reach in this discussion, which is concerned only with the question of “what was waived”; i. e., the overall Statute of Frauds (subject only to retraction under § 2-209(5)), or, as I contend, just the bank’s right to terminate.

. The word “term” means “that portion of an agreement that relates to a particular matter.” (Emphasis supplied) 12A § 1-201(42).

. The Restatement declares:
“The performance of a condition qualifying a promise in a contract within the Statute may be excused by an oral agreement or promise of the promissor that the condition need not be performed, if the agreement or permission is given while performance of the condition is possible, and in reliance of the agreement or permission, while it is unrevoked, the promissee materially changes this position.”

. Obviously we are concerned here with how the courts of Pennsylvania would construe § 2-209(4). As noted, the Pennsylvania Comment cites as accord Restatement of Contracts § 224. While my research discloses no direct case on point with the instant case, § 224 has been cited with approval in Pennsylvania, leading me to the conclusion that the restricted waiver interpretation implicit in § 224 would be the interpretation placed upon § 2-209(4) by the Pennsylvania courts. See, e. g. Edelstein v. Carole House Apartments, Inc., 220 Pa.Super. 298, 286 A. 2d 658, 663 (1971) ; Universal Builders, Inc. v. Moon Motor Lodge, Inc., 430 Pa. 550, 244 A.2d 10, 16 (1968).