commercial law (UCC ART 2) ESSAY

The Dec Cooperative ("Dec or Dec Coop") Association is a corporation that has been in existence since 1953. It owns and operates a grain elevator and its principal business is the purchasing of wheat and other grains from area farmers which it markets to larger regional elevators and grain dealers. During the fiscal year ending March 31, 2011, Dec Coop purchased grain from about 500 farmers and sold grain to four regional elevators.

Dec has a well established policy of never speculating on the price of grain. Therefore, as soon as it purchases grain from a farm or farmers amounting to one train carload or about 2,000 bushels, it places a phone call to a terminal elevator at the cooperative. The procedure is a well established and well-known method of handling and marketing grain in the country. Dec Coop has a general manager and an assistant manager to run its daily operations, each of whom is authorized to enter into sales contracts.

Urban is a resident of the county. He has been engaged in the wheat farming business for about 20 years. He owns about 2,000 acres of his total farmed acreage of2320 acres. About 1,200 acres are broken out and farmable while the remaining acreage is unbroken and devoted to pasture. Urban also owns a cow herd. He is engaged solely in the farming business, although he has in the past done some custom harvesting of wheat and other grains he has sold and other grains, which he raises, to the Dec Coop and to other elevators in the area.

On July 26, 2011, Urban was on his way to do some custom wheat harvesting. He placed two phone calls to the cooperative. On the first call he requested to speak to the assistant manager but was told he was not available. Later that afternoon, Urban placed a second call to the cooperative office and did reach the assistant as a result of his second call. The Dec Coop manager contends the parties entered into an oral contract whereby Urban agreed to sell to the cooperative 10,000 bushels of wheat at $2.86 per bushel, to be delivered on or before September 30, 2011. Urban denies that any contract of sale was made during this phone call and he has never admitted by pleading, testimony or other use that a sales agreement was reached during the call; the total cash value of the wheat alleged to have been sold was $28,600.00. } During the phone conversation there was a discussion of a written memorandum of sale to be prepared and sent to Urban later. It is Dec Coop's practice to send a signed written confirmation of sale to the seller immediately after oral conversations, and Dec Coop did in fact send such a confirmation. This confirmation was signed by Dec Coop's assistant manager and was binding as against Dec Coop. Urban received the confirmation within a reasonable time, read it, and gave no written notice of objection to its contents.

Early in the morning of July 27, 2011, in reliance on the alleged oral contract of sale, Dec Coop placed a phone call to Far-Mar Co., a regional terminal elevator in Missouri, and sold the wheat for $3.40 per bushel. During the latter part of July and early part of August 2011, the price of wheat rose substantially.

On August 13, 2011, Urban notified Dec Coop that he would not deliver the wheat. The price of the wheat on that date was $4.50 per bushel. Dec Coop files suit. What result? Fully support your answer.