Editor’s Note: Law Week Colorado edits court opinion summaries for style and, when necessary, length.
Magnum Feedyard Co. v. Agri Sales U.S.A. Inc.
This appeal grew out of an alleged oral contract for the sale of alfalfa hay. After allegedly entering into the contract, the parties disagreed over the quantity that the seller was to deliver. The buyer, Magnum Feedyard Co., sued for breach of contract and promissory estoppel, claiming that it had to pay more to other suppliers because the seller, Agri Sales U.S.A., hadn’t provided as much alfalfa hay as agreed. The district court granted summary judgment to Agri Sales. Magnum Feedyard appealed.
Magnum Feedyard claims it was supposed to get 5,000 tons, and the seller supplied fewer than 2,000 tons. The seller denies that it promised to supply 5,000 tons. The contract claim thus turned on whether the parties agreed to the sale of 5,000 tons.
Because the alleged contract was oral, the threshold issue is enforceability, according to the opinion. Under Colorado law, which both parties agreed applied, a contract must ordinarily be agreed in writing when it involves the sale of goods for at least $500.
But an exception exists for oral contracts between merchants. Under this exception, merchants can make oral terms enforceable by confirming them in writing after the fact.
Agri Sales urged summary judgment, arguing the exception didn’t apply because the parties hadn’t confirmed the contract terms. Magnum Feedyard points to invoices and bills of lading, arguing these documents confirm the existence of a contract. But these documents don’t confirm the quantity term — the matter in dispute, according to the opinion.
The oral contract would become enforceable only for the quantity shown in the confirmation, according to the opinion. The opinion also notes the invoices and bills of lading say nothing about a promise to sell 5,000 tons.
The 10th Circuit Court of Appeals concluded the district court properly granted summary judgment to the seller on the contract claim.
The 10th Circuit also concluded the district court didn’t err in awarding summary judgment to the seller on the claim of promissory estoppel.
The 10th Circuit affirmed.