816 S.E.2d 716
Ga. Ct. App.2018Background
- Turfgrass stored seed at Georgia Cold Storage from 2006 through 2009 without a signed written storage agreement; multiple deliveries occurred and the last deposit was about 1.5 years before Turfgrass learned of the printed terms.
- Turfgrass discovered rodent and water damage in June 2010, made telephone complaints, and later submitted an invoice for $9,625; Cold Storage later sent a $275 check and enclosed a warehouse receipt showing printed "Contract Terms and Conditions." Turfgrass did not cash the check.
- Cold Storage’s standard practice (per its employee affidavit) was to generate warehouse receipts with preprinted terms on the reverse, keep one copy, and mail one copy to customers; actual mailings to Turfgrass during the relevant period are disputed and no mailer/depositor testified about the specific mailings.
- Turfgrass removed all seed in May 2011 after further cooling problems and filed suit in July 2013 alleging nearly $493,000 in damages; Cold Storage asserted contractual defenses based on the limitation and notice/filing periods printed on the reverse of its warehouse receipts.
- The trial court granted summary judgment to Cold Storage, concluding under UCC Article 7 (OCGA § 11-7-201) that issuance (mailing) of warehouse receipts bound Turfgrass to the terms as a matter of law; the Court of Appeals reviewed whether assent was required and whether factual disputes existed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether terms on the reverse of warehouse receipts became part of the bailment contract | Turfgrass: no assent or receipt of receipts; therefore terms (notice/limitation) are not binding | Cold Storage: its routine issuance/mailing of receipts under UCC Article 7 "issued" the receipts and bound the bailor as a matter of law | Court: assent is required; genuine factual disputes about receipt/assent preclude summary judgment for Cold Storage |
| Whether evidence of routine business practice (mailing) alone establishes assent | Turfgrass: habit evidence insufficient without proof of actual mailing/receipt and assent | Cold Storage: routine practice and copies attached show issuance and thus binding terms | Court: routine-practice evidence may be admissible but a jury must determine whether it was followed as to Turfgrass; summary judgment inappropriate |
| Whether receiving the January 2011 check and attached terms constituted assent | Turfgrass: did not cash the check and protested; no affirmative assent shown | Cold Storage: delivery of check and terms gave notice and opportunity to accept | Court: Turfgrass’s response and refusal to cash the check leave assent unresolved as a matter of law |
| Whether Article 7 of UCC displaces ordinary contract/bailment assent rules | Turfgrass: Georgia bailment/contract law requires assent; UCC does not displace that requirement | Cold Storage: UCC issuance rules control and permit binding terms via issuance | Court: Article 7 does not displace contract law requiring assent; UCC permits terms but assent remains necessary; factual issues remain |
Key Cases Cited
- Seki v. Groupon, Inc., 333 Ga. App. 319 (Ga. Ct. App.) (standard of review for summary judgment)
- Grange Mut. Cas. Co. v. Woodard, 300 Ga. 848 (Ga.) (implied and express contracts require mutual assent)
- Birmingham Television Corp. v. Water Works, 290 So.2d 636 (Ala. 1974) (terms on reverse of warehouse receipt effective only with actual or constructive notice)
- Lerner v. Brettschneider, 598 P.2d 515 (Ariz. Ct. App.) (assent required for limitation of liability in warehouse receipt)
- Thomas v. Chance, 325 Ga. App. 716 (Ga. Ct. App.) (objective test for mutual assent; extrinsic evidence for jury when disputed)