Law School Case Brief
Gen. Trading Int'l v. Wal-Mart Stores, Inc. - 320 F.3d 831 (8th Cir. 2003)
Subject to certain limited exceptions, the statute-of-frauds provision of the Arkansas version of the Uniform Commercial Code (U.C.C.) renders unenforceable any unwritten contract for the sale of goods with a value of more than $500 unless there is some writing sufficient to indicate that a contract for sale has been made between the parties and signed by the party against whom enforcement is sought.
General Trading International, Inc. (GTI), sued Wal-Mart Stores, Inc., for breach of contract, action for goods sold, and action on account in a dispute arising out of Wal-Mart's alleged failure to pay for large numbers of decorative "vine reindeer" sold to Wal-Mart for resale to the public during the 1999 Christmas season. Wal-Mart counterclaimed for breach of contract and for fraud. According to Wal-Mart, most of the reindeer, manufactured in Haiti, were "scary-looking" and unsuitable for sale as Christmas merchandise. Wal-Mart claimed that GTI orally agreed to absorb $200,000 of the purchase price because of Wal-Mart's dissatisfaction with the quality of the product. GTI, denying the existence of the alleged oral agreement, filed a motion for partial summary judgment, seeking an award of $200,000 of the unpaid balance, by arguing that the alleged oral agreement was unenforceable and violated the statute of frauds. The District Court granted partial summary judgment in favor of GTI and submitted the remaining claims to a jury, which returned a verdict in GTI's favor. Subsequently, the District Court denied WalMart's motion for judgment as a matter of law or for a new trial and GTI's request for attorney fees. Wal-Mart appealed the grant of partial summary judgment and the denial of its motion for a new trial. GTI cross appealed the denial of attorney fees.
Was the alleged oral agreement between GTI and Wal-Mart unenforceable becase it violated the statute of frauds?
The appellate court noted that while the merchants' exception to the statute of frauds did not require a confirmatory writing to be signed by the party to be charged, Ark. Code Ann. § 4-2-201(2), the writing still must satisfy the dictates of § 2-201(1). Under the U.C.C., all that was required for a writing to indicate a contract for sale has been made under § 2-201(1) is that the writing afford a basis for believing that the offered oral evidence rests on a real transaction. The appellate court agreed with the decision of the district court, holding that as a matter of law, none of Wal-Mart’s emails were sufficient to indicate the formation or existence of any agreement between the parties through inference or otherwise; it was devoid of any language concerning an agreement on the issue of $200,000 for markdowns.
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