462 P.3d 822
Utah Ct. App.2020Background
- Seller (Scott Anderson Trucking) told Buyer (Nielson Construction) it had a pile of rotomill (about 12,000–15,000 tons) and would sell at $25/ton; Buyer’s rep later emailed: “we will need 12000 tons of Rotomill… will pay you $25.00 a ton.”
- Buyer knew the pile’s location and had opportunity to inspect but did not examine it until at least 16 months later.
- In Sept. 2015 Buyer used rotomill from another source and informed Seller it rejected Seller’s rotomill as unsatisfactory; thereafter Seller’s rotomill had no market.
- Seller sued for breach of contract; both parties moved for summary judgment.
- District court held there was an enforceable contract for 12,000 tons at $25/ton, Buyer’s rejection/repudiation came too late under the UCC, and entered judgment for Seller (principal $300,000 plus interest).
- Buyer paid the judgment amounts while expressly reserving its right to appeal; the appellate court held the appeal was not moot and affirmed the district court.
Issues
| Issue | Plaintiff's Argument (Buyer) | Defendant's Argument (Seller) | Held |
|---|---|---|---|
| Was there an enforceable contract? | Email was a first offer or counteroffer (no mutual assent) so no binding contract. | Parties’ communications and conduct (email specifying 12,000 tons and $25/ton) established a UCC sale. | Court: UCC governs; Buyer failed to grapple with UCC; enforceable contract existed for 12,000 tons at $25/ton. |
| Did Buyer properly repudiate or reject the goods? | Buyer had good cause to terminate and did so when it rejected the rotomill in 2015. | Rejection was untimely; Buyer should have inspected and rejected sooner—UCC requires seasonable notice. | Court: Rejection/repudiation was untimely as a matter of law (>=16 months); Buyer barred from remedy. |
| Was the contract a requirements contract limiting quantity to actual job needs? | Email tied the sale to Gooseberry Project needs, so obligation limited to the amount actually used (~6,825 tons). | Email set a definite quantity ("will need 12,000 tons") and did not condition purchase on actual later needs. | Court: Not a requirements contract; 12,000 tons was the agreed quantity. |
| Is the appeal moot because Buyer paid the judgment? | Payment was made to abate interest while expressly reserving appeal rights. | Acceptance of payment and satisfaction of judgment waives appeal; appeal is moot. | Court: Under Utah Resources exception, Buyer preserved appeal by clearly reserving rights on the record; appeal not moot. |
Key Cases Cited
- Flowell Elec. Ass’n v. Rhodes Pump, LLC, 361 P.3d 91 (Utah 2015) (standard for reviewing summary judgment)
- Utah Res. Int’l, Inc. v. Mark Techs. Corp., 342 P.3d 761 (Utah 2014) (preserving appellate rights despite paying judgment when reservation is clear on the record)
- Salt Lake City Corp. v. Big Ditch Irrigation Co., 258 P.3d 539 (Utah 2011) (definition and treatment of requirements contracts under UCC)
- Herm Hughes & Sons, Inc. v. Quintek, 834 P.2d 582 (Utah Ct. App. 1992) (UCC sections on contract formation and 2-207 analysis)
- Bank of Am. v. Adamson, 391 P.3d 196 (Utah 2017) (appellate-briefing burden to cite authority and explain applicability)
- Miller v. West Valley City, 397 P.3d 761 (Utah Ct. App. 2017) (appellant must show error in the basis for the lower court’s decision)