Bio-Tech Pharmacal, Inc. v. Int'l Bus. Connections, LLC - 86 Ark. App. 220, 184 S.W.3d 447 (2004)

Rule:

Under certain circumstances, course of performance is relevant in determining the meaning of an agreement for the sale of goods. Ark. Code Ann. § 4-2-208(1) (2001). The parties themselves know best what they have meant by their words of agreement and their action under that agreement is the best indication of what that meaning was. Additionally, the parties' course of performance is relevant to the question of whether written confirmation had been waived.

Facts:

The supplier sold materials to the manufacturer. The supplier testified that he was in almost daily contact by telephone with the manufacturer and that, if he could locate material that the manufacturer was interested in purchasing, he would telephone one of the manufacturer's personnel and advise of the material's availability and price. If agreeable, the manufacturer issued a purchase order. The supplier filed the instant suit after the manufacturer failed to pay a certain sum for materials shipped pursuant to three particular purchase orders. The manufacturer defended on the ground that the supplier had not confirmed the purchase orders as required. The trial court rendered judgment in favor of the supplier. The manufacturer appealed.

Issue:

Did the trial court err in ruling that the manufacturer waived the confirmation requirement?

Answer:

No.

Conclusion:

The court affirmed, holding that the trial court did not err by denying the manufacturer's motion for a directed verdict under Ark. R. Civ. P. 50(a) (2004). Although purchase orders were generally considered offers and the purchase orders at issue required written confirmation, under Ark. Code Ann. § 4-2-206(1)(a) and (b) (2001), such orders could be accepted by any reasonable means. The parties had not had a practice of confirming the purchase orders in writing. Moreover, the purchase order's terms did not require any particular type of confirmation. It was reasonable to infer that the orders confirmed oral contracts.