This is аn appeal by BarclaysAmerican/Business Credit, Inc. (“Barclays”) from a take-nothing judgment in favor of E & E Enterprises, Inc. (“E & E”). Barclays brings five points of error contending (1) that the trial court erred in concluding that a contract was created between Wrape Forest Industries, Inc. d/b/a Industrial Wood Products (“Wrape”) and E & E by the promise of Wrape to provide 60 days notice of ceasing operations; (2) that the trial court erred in concluding against the great weight of the еvidence that E & E could assert defenses based upon facts arising prior to knowledge of the assignment from *696 Wrape to Barclays; (3) that the trial court erred in concluding that E & E could assert a defense of anticipatory repudiation with respect to failure to deliver a shipment of products in August, 1982; (4) that the trial court erred in concluding that E & E could assert affirmative defenses against Bar-clays based upon E & E’s dealings with Wrape; and (5) that the trial cоurt erred in failing to find for Barclays and, thus, in failing to award stipulated attorney’s fees to Barclays. For the following reasons, we affirm. the judgment of the trial court.
Much of the evidence in this case was stipulated. In addition, testimony was taken at a trial before the court. The court then made findings of fact and conclusions of law. The evidence reflects that in 1980 Barclays, then doing business as Aetna Business Credit, Inc., and Wrape executed a General Loan аnd Security Agreement (“Agreement”) whereby Wrape granted Barclays a security interest in certain property, including its accounts receivable. The security interest was perfected by the filing of financing statements. Barclays advanced Wrape funds in accordance with the terms of the Agreement. In January of 1982, Wrape filed for protection from its creditors under Chapter 11 of the Federal Bankruptcy Act.
E & E and Wrape had been doing business togеther for several years. The normal course of their business dealings was for E & E to contact a representative of Wrape, Inc. and place an order for wood products, which Wrape produced, for use in production of wooden cabinets by E & E. The orders varied in size. Wrape would confirm its acceptance of the order by sending E & E a written acknowledgment. The shipment of wood products was delivered to E & E approximаtely six weeks after an order was placed, and it was accompanied by an invoice reflecting the price to which Wrape and E & E had agreed. E & E normally paid Wrape between ten and sixty days after delivery of the shipment. Wrape delivered a shipment to E & E on June 9, 1982 (“S-l”) and another on June 28, 1982 (“S-2”). The prices agreed upon by Wrape for each of these orders totaled $76,105.08. The parties stipulated that the president of Wrape agreed with the рresident of E & E that Wrape would give E & E sixty days advance notice of Wrape’s ceasing of operations.
On June 30, 1982, the bankruptcy court ordered all of the collateral that Wrape had pledged to Barclays, including its accounts receivable, transferred to Barclays. The amounts owed by E & E for S-l and S-2 were included in the accounts receivable transferred to Barclays.
Wrape also acknowledged an order to deliver a shipment to E & E on July 16, 1982, which delivery date was moved up to July 12, 1982, upon agreement between Wrape аnd E & E (“S-3”) and an order to deliver a shipment to E & E in the first week of August, 1982 (“S-4”).
On July 16,1982, the president of Wrape, William Wrape, orally notified E & E that it had closed its plant and would not deliver the materials described in the acknowledge-ments for S-3 and S-4. Wrape told E & E that the only way to receive the deliveries for S-3 and S-4 was to talk to Mike Wills, the vice-president of Barclays.
On or about July 23,1982, Wills sent E & E a letter notifying it that Barclays had been assigned the accounts receivable of Wrape. This letter was received by E & E on July 28, 1982.
Barclays brought this action to recover the amounts claimed for S-l and S-2. E & E answered that it was damaged as a result of Wrape’s breach of its contracts with it for the delivery of S-3 and S-4 and was thus entitled to offset the amount of its damage against Barclays’s claims.
Barclays and E & E have stipulated that E & E did not pay Barclays the $76,105.08 owed for S-l and S-2. They have further stipulated that Wrape was advised prior to May 1, 1982, that if Wrape terminated its accepted contracts with E & E without advance notice, E & E’s production of cabinets would be interrupted and it would take at least six weeks to secure similar materials from another supplier; that E & *697 E had no knowledge before July 16, 1982, of Wrape’s intention to cease production; that E & E did not have adequate inventory necessary to manufacture cabinets scheduled for production from July 16, 1982, until it could secure another supplier; that E & E could not secure materials from another supplier until August 18, 1982; and that, during that period, E & E produced 6,347 fewer cabinets than it would have except for Wrape’s failure to deliver S-3 and S-4. Further, the parties stipulated that, due to Wrape’s failure to give E & E reasonable advance notice of its inability to deliver the wood products, E & E had to refuse further orders for its cabinets until it could secure such materials from another supplier. Finally, the parties stipulated that E & E suffered the following damages: a loss of net profits of $126,940.00 as a direct and proximate result of the aforementioned loss of production and sales; $6,900.00 in expenses incurred to minimize E & E’s damages which involved the cutting, reshaping, and culling of materials on hand; $11,500.00 for the cost of overtime labor in attempting to minimize damages; and $22,500.00 due to the cost of waste materials arising out of the cutting and reshaping of materials on hand during this stated period. Based on these stipulated facts, the court found that E & E had proved a valid offset in the amount of $167,840.00.
The primary issue in this appeal is whether the offset found by the trial court was proper. In its first point of error, Barclays contends that the court erred in concluding that a contract was created by an alleged promise of the president of Wrape to provide 60 days’ notice of ceasing operations. Barclays argues that there is insufficient evidence of a contract between the parties requiring 60 days’ notice of Wrape’s ceasing operations because there was no consideration tо support the alleged promise and, further, there was no requirements contract. In its Memorandum Decision, which was adopted by the trial court as findings of fact and conclusions of law, the court found that E & E’s claim arose out of a promise by Wrape to give the 60 day notice, an order for S-3 and S-4 placed by E & E in reliance on Wrape’s promise, and a breach by Wrape of their agreement by notifying E & E on July 16, 1982, that the plant was closing that same day. Thus, the court found that the consideration for the 60 day notice was E & E’s agreement to purchase S-3 and S-4. However, Barclays argues that E & E did not show that the course of dealing between Wrape and E & E was altered in any way in response to the promise of 60 days’ notice and thus no valid consideration was given. Further, Barclays urges that there was no requirements contract between Wrape and E & E. This argument is addressed to the court’s finding that E & E had no supplier other than Wrape for certain wood products.
We need not decide whether the evidence supports the court’s findings as to the 60 day notice and the supporting consideration, or whether a requirements contract existed, because the judgment of the trial court was sufficiently supported by the findings of fact that E & E placed the orders for S-3 and S-4 and Wrape confirmed its acceptance of the orders by the written acknowledgments for S-3 and S-4. On July 16, 1982, Wrape notified E & E that it would not deliver S-3 and S-4. The court concluded that Wrape breached the contract to deliver S-3 and S-4. We find that the evidence supports these findings and conclusions.
Under TEX.BUS. & COM.CODE ANN. § 2.204(a) (Vernon 1968),
1
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 contract. Under section 2.206(a)(2), an order or other offer to buy goods for prompt or current shipment shall be construed as inviting ae-
*698
ceptanee by a prompt promise to ship. Although there is no Texas case law directly on point, other jurisdictions which have adopted this section from the Uniform Commercial Code have interpreted it to include a situation like the one at hand. In
American Bronze Corp. v. Streamway Products,
The trial court found that there was a contract between Wrape and E & E for Wrape to deliver S-3 and S-4 on the stated dates and that Wrape breached the contract when it did not deliver S-3 and S-4. The court found that the oral notification on July 16, 1982, that Wrape would not deliver constituted an anticipatory repudiation under section 2.610. The court then found that under section 2.610(2), E
&
E was entitled to resort to any remedy for the breach. The amount of damages claimed by E & E pursuant to sections 2.713 and 2.715, authorizing damages for incidental and consequential damages from the seller’s breach, was stipulated by the parties. We hold that the findings of fact regarding the breach of the contracts for S-3 and S-4 are sufficient to support the judgment of thе trial court and are not against the overwhelming weight and preponderance of the evidence.
De Benavides v. Warren,
In its second point of error, Barclays contends that the court erred in concluding against the great weight of the evidence that E & E could assert defenses based on facts arising prior to E & E’s knowledge of the assignment from Wrape to Barclays. The trial court cited
Glass v. Carpenter,
(a) Unless an account debtor has made an enforceable agreement not to assert defenses or claims arising out of a sale as provided in Section 9.206 the rights of an assignee are subject to
(1) all the terms of the contract between the account debtor and the assignor and any dеfense or claim arising therefrom; and
(2) any other defense or claim of the account debtor against the assignor which accrues before the account debtor receives notification of the assignment (emphasis added).
Section 9.318(a)(2) is applicable to this case since the offset defense of E & E did not arise out of Barclays’s claim.
Barclays argues that Thurston, a vice-president of E & E, testified that on July 16, 1982, he received oral notification of the assignment by Wrape to Barclays. We note first that this oral notification consisted only of statements made by Mr. Wrape to the effect that the plant was shutting down, that S-3 and S-4 would not be delivered, and that “the only way” that E & E might get the material would be “to talk to Mr. Mike Wills at Barclays.” In regard to *699 these, Wrape gave Thurston the phone number at Barclays. Thus, Barclays argues that E & E is precluded from asserting a claim, arising on or after July 16, 1982, against Barclays based on S-3 and S-4 because the claims did not arise prior to the notification of the assignment to Barclays.
We note that this communication mаy not have been sufficient to notify E & E of the assignment of the accounts receivable. Notice is defined under section 1.201(25), (26):
(25) A person has “notice” of a fact when
(A) he has actual knowledge of it; or
(B) he has received a notice or notification of it; or
(C) from all the facts and circumstances known to him at the time in question he has reason to know it exists.
A person “knows” or has “knowledge” of a fact when he has actual knowledge of it. “Discover” or “learn” or a word or phrase of similar import refers to knowledge rather than reason to know. The time and circumstances under whiсh a notice or notification may cease to be effective are not determined by this title.
(26) A person “notifies” or “gives” a notice or notification to another by taking such steps as may be reasonably required to inform the other in ordinary course whether or not such other actually comes to know of it. A person “receives” a notice or notification when
(A) it comes to his attention; or
(B) it is duly delivered at the place of business through which the contract was mаde or at any other place held out by him as the place for receipt of such communications.
In
Chase Manhattan Bank (N.A.) v. New York,
It is clear in our case that Wrape called the closing of its business to E & E’s attention, section 1.201(26)(A), and informed E & E that it could discuss the matter with Barclays. Although we have found no case directly in point, we note that merely authorizing payment of a stated sum to a third party cannot be considered as notification that such sum has been assigned to the third party.
S & W Trucks, Inc. v. Nelson Auction Service, Inc.,
*700
In reviewing whether the July 16, 1982, conversation constituted notice to E & E of the assignment of the accounts receivable, we note that this is a question of fact; it becomes a question of law only when there is no room for ordinary minds to differ as to the proper conclusion to be drawn from the evidence.
Exxon Corp. v. Raetzer,
The trial court concluded that, under
Glass
and section 9.318, since there was no agreement by E & E not to assert defenses against Barclays, the offset defense could be asserted bеcause all of the facts on which it was based arose before the notification. We note that the key question under
Glass
and section 9.318(a)(2) is whether the
defense or claim,
not the facts on which it is based, arose before the notification.
See BarclaysAmerican/Business Credit, Inc. v. Paul Safran Metal Co.,
In its fourth point of error, Barclays contends that the trial court erred in concluding that E & E could assert a defense of anticipatory repudiation with respect to Wrape’s failure to deliver a shipment of products in August 1982. Barclays argues that E & E was notified of the assignment in July 1982, that the evidence was insufficient to establish an anticipatory repudiation with respect to the August 1982 shipment, and that any defense available to E & E as a result of the failure to make the August 1982 delivery did not arise until after E & E had notice of thе assignment. Further, Barclays contends that continued negotiations between E & E and Barclays *701 proves that anticipatory repudiation was not established. Finally, Barclays argues that, even if a breach was established as to S-3, no anticipatory breach was established as to S-4.
Our disposition of this point is governed by section 2.610 which provides that when either party repudiates with respect to performance not yet due the aggrieved party may resort to аny remedy for breach. The comments of section 2.610 provide, in pertinent part, as follows:
1. [A]nticipatory repudiation centers upon an overt communication of intention or an action which renders performance impossible or demonstrates a clear determination not to continue with performance.
Under the present section when such a repudiation substantially impairs the value of the contract, the aggrieved party may at any time resort to his remedies for a breach
2. It is not necessary for repudiation that performance be made literally and utterly impossible. Repudiation can result from action which reasonably indicates a rejection of the continuing obligation.
In
Laredo Hides Co. v. H & H Meat Products Co.,
Thus, the trial court correctly concluded that the notice of non-delivery on July 16, 1982, was an anticipatory breach of the contracts for S-3 and S-4. The finding that Wrape notified E & E on July 16,1982, that S-3 and S-4 would not be delivered is supported by the evidence and supports the judgment.
De Benavides,
In its third point of error, Barclays contends that the court erred in concluding that E & E could assert affirmative defenses against Barclays based on E & E’s dealings with Wrape because no evidence supported the court’s recognition of E & E’s affirmative defenses and E & E failed to plead any affirmative defenses, and thus, no confession and avoidance defenses were available to E & E. Our review of the pleadings reveals that E & E pleaded that it had sustained damages as a direct and proximate result of Wrape’s breach of thе contracts with it and that therefore it had valid setoffs against Barclays’s claim. We hold that this pleading gave Barclays fair and adequate notice of the evidence of the offset amounts that E & E presented.
Tennell v. Esteve Cotton Co.,
In its final point of error, Barclays argues that the court erred in failing to find for Barclays, as contended in the previоus points of error, and, as a consequence, in failing to award the stipulated attorney’s fees to Barclays. Because we have overruled all of Barclays’s points and agree that E & E was entitled to the offset, Barclays was not entitled to recover attorney’s fees since the offset exceeded its claims. The trial court correctly refused to award attorney’s fees to Barclays.
Accordingly, we overrule all of Bar-clays’s points of error and affirm the judgment of the trial court. It is ORDERED that E & E recover its costs of this appeal from Barclays and United States Eire Insurance Company, as surety on Barclays’s appeal bond.
Notes
. Unless otherwise noted, all statutory references herein are to TEX.BUS. & COM.CODE ANN. (Vernon 1968 and Vernon Supp.1985).
. Although actual notice may be expressed or implied,
Exxon Corp. v. Raetzer,
. Even if we were to find that the trial court’s finding was erroneous and that the notification of the assignment did occur on July 16, 1982, the evidence shows that the breach still occurred when Wrape told Thurston that the plant was shutting down. He then told Thurston that he could contact Wills at Barclays. Thus, the breach occurred first and E & E could assеrt the offset defense based upon the breach against Barclays.
We also mention, in passing, the stipulated facts that Wrape and E & E had been doing business together for several years and that the normal course of their business dealings was that E & E would place an order; Wrape would confirm its acceptance of the order by sending E & E an acknowledgment; Wrape would send the materials to E & E six weeks after an order had been placed; and then, E & E would pay Wrape for the shipment between ten and sixty days following delivery. This evidence indicates that the сourse of dealing between Wrape and E & E was to treat the entire Wrape-E & E account as a "running account." Further, Bar-clays sent E & E a single notice of assignment of the entire Wrape-E & E account rather than individual notices of assignment of each invoice. Thus, it could be deducted that the entire Wrape-E & E account was a single contract and that, therefore, under § 9.318(a)(1), E & E is entitled to offset claims arising out of any sales by Wrape to it, including those based on the non-delivery of S-3 and S-4.
United California Bank v. Eastern Mountain Sports, Inc.,
. With respect to the delivery of S-3, the court might well have concluded that the breach occurred on July 12, 1982, when S-3 was not delivered, since the court could have found that time was of the essence in the performance of the contract.
See Neco Engineering Co. of Texas v. Lee,