J.D Field & Company v. the United States Steel International

Question: please summarize and include

the following;

Fact:

Judgment:

Issue:

Holding:

General Analysis

Applied Analysis:

J .D. Fields & Company, Inc. V. United States Steel International, Inc. 426 Fed. Appx. 271 (5th Cir. 2011) United States Steel International (USSI) sells and markets steel products manufactured at U.S.-based steel mills for sale on the international market. J.D. Fields & Company, Inc. (J.D. Fields) distributes steel products from producers to consumers. USSI and J.D. Fields were repeat contracting partners on at least 30 occasions over the prior ve years. The typical course of their dealings was that J.D. Fields requested a price quotation from USSI, USSI provided J.D. Fields that quote, J.D. Fields sent USSI a purchase order, USSI sent J.D. Fields an order acknowledgment, and USSI shipped the product along with an invoice. The present case resulted from a dispute over two e-mail-based transactions. The first transaction involved a type of seamless carbon steel pipe for which J.D. Fields requested a price quote on February 6, 2008. USSI's representative provided the quote for 800 feet, but clearly indicated that USSI could not manufacture that particular type of pipe without an order for at least 100 tons. On February I], 2008, J.D. Fields sent a purchase order (PO 45850) to USSI for 880 feet of the pipe; however, 880 feet would constitute only 60 tons. On February 14, 2008, J.D. Fields inquired about the order, and USSI responded that it could not run less than 100 tons of the pipe. Thus, USSI requested a revised purchase order, which J.D. Fields never sent. USSI likewise never issued an order acknowledgment for PO 45840. On March 6, 2008, J.D. Fields contacted USSI for a quote on two other types of pipe. USSI responded with a quote for the price, timing, delivery location, and other details. That same day, J.D. Fields sent a second purchase order (PO 46110) match- ing the details of the quote. On March 26, 2008, J.D. Fields followed up on the status of PO 45850, particularly inquiring whether USSI had found any other takers for the same size pipe to fill out the 100-ton required allotment. J.D. Fields also requested an order acknowledg- ment on PO 45850. USSI responded that it had \"not found any other order to piggyback on, \" so J.D. Fields would need to order the 100-ton minimum. USSI requested instructions for how to proceed. J.D. Fields responded that it could not afford to keep its customers waiting and risk losing their business and indicated that it would \"look into \" increasing the order to hit the 100-ton minimum. Shortly thereafter, J.D. Fields 's representative and the USSI representative spoke on the phone, during which J.D. Fields 's representative claims he made a more concrete commitment to order 100 tons \"if need be.\" Even after these exchanges, J.D. Fields never sent a revision of PO 45850 for I 00 tons or more. On April 24, 2008, J.D. Fields inquired with USSI about the status of both purchase orders. That inquiry prompted a series of increasingly contentious communications between the companies. USSI argued that J.D. Fields had never actually ordered the required 100 tons on PO 45850 and that, in any event, it was not taking new orders during the relevant time frame due to an impending price increase. As to PO 46110, USSI admitted that it may have \"fallen through the cracks.\" PO 46110 was never processed by USSI. Ultimately, USSI concluded that the purchase orders had not been entered into its systems, that USSI never sent J.D. Fields order acknowledgments on either purchase order, and that USSI did not plan to ll the orders. J.D. Fields led suit against USSI for breach of contract (and other claims not relevant here) on the basis of both purchase orders. The district court granted USSI's motion for summary judgment on the breach of contract claims. J.D. Fields appealed. Aycock, Judge The first issue on appeal is whether the district court properly granted summary judgment on J .D. Fields's breach of contract claims when it concluded that USSI's price quotations could not reasonably be construed as offers as a matter of law. . . . When parties enter into a contract for the sale of goods, the Uniform Commercial Code (\"UCC\") controls the conduct of the parties. There is no dispute that Article 2 of the UCC governs this trans- action, as the contracts at issue concern the sale of steel. Steel qualifies as a \"thing . . . which [is] movable at the time of iden- tication to the contract for sale,\" and therefore it is considered a \"good.\" Tex. Bus. & Com. Code Ann. 2.105(a). Where the UCC applies, it displaces all common law rules of law regarding breach of contract and substitutes instead those rules of law and procedures set forth in the UCC. However, common law prin- ciples of law and equity continue to supplement its provisions. In Texas, the essential elements of a breach of contract claim a are: (l) the existence of a valid contract; (2) performance or ten- dered performance by the plaintiff; (3) breach of the contract by the defendant; and (4) damages sustained by the plaintiff as a result of the breach. The central dispute in this action revolves around the first element: whether the parties ever formed a valid contract as to [the two purchase orders]. Contract formation hinges on the existence of an acceptable offer. The UCC, however, provides no guidance as to what an offer is. Although the UCC does not ; define the term \"offer,\" we have held that \"[a]n offer is an act that leads the offeree reasonably to believe that assent (i.e., accep- Purchase Order 45850 contained a different quantity than the initial inquiry. That is, the purchase order requested 880 feet, whereas the price quote was for 800 feet. Importantly, neither a quantity of 800 feet nor 880 feet was enough to meet the lOOton minimum expressly required by USSI. J.D. Fields, while con- ceding that its quantity specifications failed to meet this 100-ton minimum, asserts that it told USSI it would increase its order. On March 26, 2008, J .D. Fields's representative . . . e-mailed USSI's representative . . . stating that J .D. Fields was \"looking into in- creasing [the] order to . . . the minimum 100 tons.\" Similarly, [J .D. Fields] alleged . . . that [its representative] also discussed this order with [the USSI representative] on the phone and stated that, \"if need be, we will go up to 100 tons.\" The exchange . . . at most establishes that J .D. Fields was consideringor \"looking into\"increasing its order to reach the 100-ton minimum. There is no evidence that J .D. Fields in fact did increase its order or that the parties ever reached an agree- ment as to a quantity term meeting the 100-ton minimum. The quote contained a 14-day validity period. By the time the March 2008 exchange occurred, the validity period for the price quote had long lapsed. Further, [another] USSI representative repeat- edly informed [J .D. Fields] that it would need a revised purchase order. J .D. Fields concedes that it never submitted such a revised order. As such, the district court did not err in finding that it was unreasonable as a matter of law for J .D. Fields to believe that the price quotation was an offer. Thus, we affirm the grant of sum- mary judgment as to Purchase Order 45850. tance) will conclude the deal.\" Axelson, Inc. v. McEvoy-Willis, 7 F.3d 1230, 1232 (5th Cir. 1993). A contract for the sale of goods may be made in any manner sufficient to show agreement, including conduct by both parties which recognizes the existence of such a contract. TEX. BUS. & COM. CODE ANN. 2.201.210. Generally, a price quotation, such as one appearing in a brochure or on a yer, is not consid- ered an offer; rather, it is typically viewed as an invitation to Offer. Despite this general rule, a price quotation, if detailed enough, can constitute an offer capable of acceptance. However, to do so, it must reasonably appear from the price quote that assent to the quote is all that is needed to ripen the offer into a contract. Purchase Order 45850 The rst e-mailed price quotation was sent from USSI to J .D. Fields on February 6, 2008. The price quotation contained the following: (i) a specied price per ton, (ii) specied payment term, (iii) a general delivery time, (iv) a validity period (\"valid for 14 days\"), (v) specied rolling/manufacturing time frame, (vi) product speci- cation, (vii) the quantity (800 feet), and (viii) that the price quote was subject to heat lot accumulation of 100 tons. The price quote did not contain the specic shipping location, the mode of shipping, or the legal terms and conditions. Five days after receiving this price quote, J .D. Fields faxed USSI Purchase Order 45 850. Purchase Order 46110 Purchase Order 46110 falls on different footing than Purchase Order 45850. While the general rule is that a price quote is not an offer, we have held that a price quote, if detailed enough, can constitute an Offer capable of acceptance. In Tubelite, Inc. v. Risica & Sons, Inc., 819 S.W.2d 801, 803 (Tex.1991), the Texas Supreme Court found a price quotation sufficiently detailed to constitute an offer under the Texas UCC when the quote stated it was valid for 60 days, was signed by Tubelite's authorized agent, and did not limit acceptance to a specified manner. In [a similar prior case], the lower court had noted that the price quote con- tained product specifications, service options, and an itemized price breakdown. The price quote . . . likewise contained no lan- guage of approval, or any other indicia suggesting that an order would be subject to approval before it was accepted. Here, the price quotation preceding Purchase Order 46110 was considerably detailed. It was also only transmitted to J .D. Fields. See RESTATEMENT (SECOND) OF CONTRACTS 26, cmt c (stating that a \"relevant factor\" for \"determining whether an offer is made\" is the \"number of persons to whom a communication is addressed\"). The quote contained the following information: (i) a specified price, (ii) delivery time, (iii) a validity period (\"valid for 14 days\"), (iv) specified rolling/manufacturing time frame, (V) product specification, (vi) a reference to the quan- tity listed in JD. Fields's email, and (Vii) a delivery location. Further, unlike some of the previous price quotations sent to ID. Fields from USSI, this particular price quote was devoid of any language which would condition the formation of a contract on some further step. . . . Specifically, J .D. Fields provided evidence that previous emailed price quotes were explicitly conditioned on \"mill and steel availability\" or were \"subject to prior sale.\" [The J .D. Fields representative] testified via sworn affidavit that it was his understanding that when a quote from USSI gave a va- lidity period without further condition on mill approval, it meant that the representative presenting the quote had already checked with the mill regarding the availability of the steel needed to meet the request. J .D. Fields transmitted Purchase Order 46110 five days after receiving USSI's price quote, and the purchase order mirrored the terms contained in the price quotation. [The district court relied on industry custom and the parties' course of dealing to determine that the price quotes could not he offers.] While the district court's conclusions regarding industry custom and course of dealing in this case are relevant to the issue of reasonableness, the UCC never informs that industry cust and course of dealing are alone determinative of the issue of c tract formation. As such, industry custom and course of dea do not compel the conclusion that a price quotation cannot construed as an offer as a matter of law. Contract formation is a question of fact under Texas law and, h the price quotation was detailed, transmitted only to ID. Fields, i of any conditional language, sent in direct response to an ian from J .D. Fields's representative, did not limit acceptance to a sp ed manner, and contained a validity period. Viewing the evide in the light most favorable to the nonmovant, there are question material fact present as to whether J .D. Fields could reasonably c strue the price quote relating to Purchase Order 461 10 as an offer the summary judgment stage, we may not weigh or decide fac disputes or make credibility determinations. Although we nd summary judgment was not appropriate, we express no view on ultimate merits of JD. Fields's breach of contract claim. Accordingly, the grant of summary judgment as to Purcl Order 46110 is reversed and remanded for further proceedi as the district court may deem appropriate