Standard Bent Glass Corp. v. Glassrobots Oy - 333 F.3d 440 (3d Cir. 2003)

Rule:

The Uniform Commercial Code, as adopted by Pennsylvania, recognizes a party's acceptance of a contract through performance and does not require a signed agreement. Under U.C.C. § 2-201(3)(a), a party's partial performance removes an agreement from the Statute of Frauds. In a commercial transaction involving the sale of goods, where the parties' performance demonstrates agreement, courts look past disputes over contract formation and move directly to ascertain its terms: the courts see no need to parse the parties' various actions to decide exactly when the parties formed a contract. The parties' performance demonstrates the existence of a contract. The dispute is, therefore, not over the existence of a contract, but the nature of its terms. When the parties' conduct establishes a contract, but the parties have failed to adopt expressly a particular writing as the terms of their agreement, and the writings exchanged by the parties do not agree, U.C.C. § 2-207 determines the terms of the contract.

Facts:

Glassrobots Oy (“Glassrobots”) responded to Standard Bent Glass Corporation’s (“Standard”) offer to purchase with a standard sales agreement that included three references to industry guidelines known as Orgalime S92, which provided a binding arbitration clause for all contractual disputes. Standard faxed a. return letter that accepted Glassrobot’s standard sales agreement as a template and requested five changes. Standard wired the payment to Glassrobots. Although Standard never signed the revised sales agreement, the parties continued to perform. Subsequently, Standard Bent Glass noticed defects in the equipment. The parties disputed the cause of the defects, and Standard filed a complaint against Glassrobots in state court. After removal to federal court, Glassrobots filed a motion to compel arbitration under an appendix to the standard sales agreement that Standard claimed it never received. The district court granted Glassrobot’s motion and Standard appealed. 

Issue:

1. Was there a valid agreement between Glassrobots and Standard? 
2. Did the agreement contain a binding arbitration clause?  

Answer:

1) Yes. 2) Yes.

Conclusion:

The appellate court found that the Uniform Commercial Code, as adopted by Pennsylvania, recognized a party’s acceptance of a contract through performance and did not require a signed agreement. The parties formed an agreement under 13 Pa. Cons. Stat. § 2207 that incorporated by reference the Orgalime S92 arbitration clause because Standard’s use of Glassrobot’s standard sales agreement as a template and its authorization of the wire transfer constituted a definite and seasonable expression of acceptance that evinced the formation of a contract, and Standard failed to object to the arbitration terms of Orgalime S92, and failed to show surprise or hardship. Accordingly, the judgment of the district court was affirmed.