Brooks Peanut Co. v. Great Southern Peanut, LLC
322 Ga. App. 801
| Ga. Ct. App. | 2013Background
- Brooks Peanut (buyer) and Great Southern Peanut (GSP, seller) are competing peanut shellers; Mazur & Hockman (M & H) is a broker that solicited offers and sent a written confirmation by fax after alleged oral agreement.
- On Sept. 20, 2010, Brooks (through broker Strother) communicated a counteroffer to GSP for 3,168,000 lbs at $.4675/lb with monthly 2011 deliveries; GSP’s manager allegedly accepted but later said he withdrew when he learned the buyer was a competitor.
- M & H immediately faxed a confirmation on its letterhead to both parties listing buyer, seller, quantity, price, delivery schedule, and a note that seller’s contract and buyer’s purchase order were “to follow.” The confirmation bore Strother’s signature on the broker letterhead.
- GSP did not issue any separate written contract; Brooks did not issue a purchase order. GSP received the confirmation and raised objections only months later. M & H had previously used similar confirmations to memorialize transactions between the parties.
- Brooks sued for breach, promissory estoppel, negligent misrepresentation, fraud, and attorney fees. Trial court granted summary judgment to GSP (Statute of Frauds bar) and denied Brooks’s motion to compel arbitration. The court of appeals reversed summary judgment on Statute of Frauds and related claims, but affirmed denial of arbitration.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Statute of Frauds (OCGA § 11-2-201) bars enforcement because no signed writing by party to be charged | Brooks: M & H confirmation is a writing sufficient to indicate a contract and was received by GSP; merchant-confirmation rule applies | GSP: confirmation insufficient—condition precedent (seller’s contract to follow), not signed by GSP, M & H lacked authority | Held: Reversed. Fact issues exist whether confirmation satisfied § 11-2-201(1)/(2); merchant-confirmation rule applies and jury could find M & H acted as agent so signature/authorization issue is triable |
| Applicability of UCC § 2-201(2) (merchant confirmation / reply doctrine) | Brooks: both are merchants; confirmation was sent promptly, recipient knew contents, and GSP failed to object in 10 days | GSP: confirmation not “sufficient against the sender” and recipient didn’t sign; condition precedent prevents enforcement | Held: Reversed. Court found confirmation could meet § 11-2-201(2) elements; disputed agency and signature issues preclude summary judgment |
| Whether M & H was agent (or dual agent) whose signature binds one or both parties | Brooks: evidence supports M & H acting for Brooks (or as dual agent) and broker form signed on M & H letterhead can satisfy signature requirement | GSP: previously asserted M & H was GSP’s agent and argues M & H couldn’t sign for Brooks; also contends M & H lacked authority to confirm | Held: Fact question for jury. Agency (including dual agency) may be proved circumstantially; Prophecy rule inapplicable to bar Brooks’s alternative position here |
| Whether arbitration clause incorporated via reference to American Peanut Shellers Assn. Trading Rules | Brooks: confirmation references APSA trading rules (by the “Quality” line), which contain arbitration provisions, so arbitration should be compelled | GSP: no explicit arbitration clause on confirmation; reference is limited to quality standards | Held: Affirmed. Confirmation does not clearly incorporate arbitration provisions; reference to trading rules pertains to commodity quality, not dispute-resolution clauses |
Key Cases Cited
- Daniel Mill, LLC v. Lyons, 283 Ga. App. 604 (appellate summary-judgment de novo review)
- Harris v. Hine, 232 Ga. 183 (writing need only indicate contract and specify quantity under UCC Statute of Frauds)
- Prophecy Corp. v. Charles Rossignol, Inc., 256 Ga. 27 (self-contradictory sworn testimony may be disregarded on summary judgment)
- Jackson v. Meadows, 153 Ga. App. 1 (unsigned invoice not sufficient; confirmation must be signed by sender)
- Johnson v. DeKalb County, 314 Ga. App. 790 (formal writing as condition precedent vs. memorialization — intent controls)
- Dixie Aluminum Prods. Co. v. Mitsubishi Int’l Corp., 785 F. Supp. 157 (confirming document treated as contract and binding arbitration clause therein)
- Jinright v. Russell, 123 Ga. App. 706 (writing satisfying Statute of Frauds does not relieve claimant of burden to prove contract existence and terms)