463 F.Supp. 543, 26 UCC 621 (N.D.Miss. 1978)
Sometime prior to September 13, 1977, Ivey’s Plumbing & Electric Company, Inc., a Mississippi corporation with offices in Kosciusko, became interested in bidding as a subcontractor for the mechanical portion of a construction project at the Naval Construction Battalion Facility in Gulfport, Mississippi.1 To prepare its bid, Ivey’s sought quotations for five air compressors specified in the project plans.2 On September 13, 1977, Petrochem Maintenance, Inc., a Louisiana supplier, provided an oral quotation of $89,073.62, which was the lowest, and Ivey’s used it in its successful bid to the prime contractor that same day.3
Petrochem had obtained its quotation the previous day from Gardner-Denver Company, a Delaware manufacturer, through agent Robert Theriot, who provided an estimate sheet for two compressors and indicated the price for three more.4 Shortly after the bid acceptance, Petrochem learned that competitors were quoting much higher prices around $144,000.5 Gardner-Denver then issued a revised quotation of approximately $113,000 on September 26, 1977.6 Petrochem issued a purchase order on October 24 to G-D for the lump sum price of $80,366.24, which was the amount of the original oral quotation by G-D.7
On October 6, 1977, representatives from Petrochem met with Ivey’s vice-president Don Hayes at Ivey’s office.8 At this meeting, Hayes delivered a purchase order to Wright for the compressor equipment in the amount of $89,073.62. Immediately prior to the issuance of the purchase order, discussions took place in which Petrochem told Hayes that Gardner-Denver was not going to honor their quotation.9 Ivey’s subsequently wrote to Petrochem on November 1 demanding performance or it would buy elsewhere.10
When Petrochem failed to supply the equipment, Ivey’s purchased the compressors from Ingersoll-Rand for a price of $121,000.11 Ivey’s then filed suit in the Chancery Court of Attala County, Mississippi, seeking $31,926.38 in damages plus interest and attorney fees from both Gardner-Denver and Petrochem.12 The case was removed to the United States District Court for the Northern District of Mississippi on diversity grounds, where both defendants moved for summary judgment.13
Whether Gardner-Denver Company is liable to Ivey’s Plumbing & Electric Company, Inc. on any theory of agency, privity of contract, or third-party beneficiary status?14
Under Mississippi law, liability on a contract theory requires either direct privity between the parties or an agency relationship. An agency relationship requires manifestation by the principal that the agent shall act for him, the agent’s acceptance, and the understanding that the principal is to be in control. Third-party beneficiary status requires that the contract term was placed for the plaintiff's direct benefit rather than as a mere incidental beneficiary.15
No. The undisputed facts establish that Gardner-Denver and Petrochem are separate business enterprises with no principal-agent relationship, as Petrochem operated independently, sought quotations from multiple manufacturers, and had no common agents or control by Gardner-Denver.16
Ivey’s had no contractual dealings or privity with Gardner-Denver, and the record shows no evidence that any term in negotiations between Gardner-Denver and Petrochem was intended for Ivey’s direct benefit.17
Gardner-Denver Company is entitled to summary judgment against Ivey’s Plumbing & Electric Company, Inc. on all claims.18
Whether the statute of frauds under the Uniform Commercial Code bars enforcement of any alleged contract between Gardner-Denver Company and Petrochem Maintenance, Inc.?19
Mississippi's Uniform Commercial Code § 75-2-201 provides that a contract for the sale of goods for $500 or more is not enforceable unless there is a writing sufficient to indicate that a contract for sale has been made. The writing must be signed by the party against whom enforcement is sought. An admission in pleadings or testimony that a contract was made may also satisfy the statute, as may other statutory exceptions.20
Yes. The negotiations between Gardner-Denver and Petrochem concerned the sale of goods exceeding $500, both parties are merchants, and the only writing is an estimate sheet for two compressors that does not evidence a completed contract or cover five units.21
Gardner-Denver's answer and deposition testimony contain no unqualified admission of contract formation but instead assert mistake and revocation, and no other exception such as specially manufactured goods or payment is present.22
The statute of frauds bars enforcement of any alleged contract between Gardner-Denver Company and Petrochem Maintenance, Inc.23
Whether promissory estoppel applies to prevent the statute of frauds from barring claims arising from the negotiations between Gardner-Denver Company and Petrochem Maintenance, Inc.?24
Mississippi law does not recognize promissory estoppel as an exception to the statute of frauds in sale-of-goods cases. The Supreme Court of Mississippi has consistently refused to engraft nonstatutory exceptions onto the statute. It has rejected equitable estoppel even where reliance and detriment are shown.25
No. Although Petrochem relied on Gardner-Denver's initial quotation in dealing with Ivey’s, Mississippi precedent such as Tanner v. Walsh and Thomas v. Prewitt holds that the statute of frauds cannot be avoided by promissory estoppel.26
The court must enforce the statute as written without judicially created exceptions.27
Promissory estoppel does not apply to prevent the statute of frauds from barring claims between Gardner-Denver Company and Petrochem Maintenance, Inc.28
Whether Petrochem Maintenance, Inc. is entitled to summary judgment against Ivey’s Plumbing & Electric Company, Inc. based on the statute of frauds and revocation of its offer?29
Under Mississippi's Uniform Commercial Code § 75-2-201(2), between merchants a writing in confirmation of the contract received by the party to be charged satisfies the statute unless written objection is given within ten days. Summary judgment is inappropriate where material factual disputes exist regarding whether an offer was unequivocally revoked prior to acceptance.30
No. Although Petrochem's oral quotation to Ivey’s lacks a signed writing and no admission occurred, a genuine issue of material fact exists as to whether Petrochem unequivocally revoked its offer at the October 6 meeting before Ivey’s delivered its purchase order.31 Petrochem's subsequent conduct in attempting to obtain the equipment from Gardner-Denver and failing to object to the purchase order within ten days raises inferences that must be resolved at trial.32
Petrochem Maintenance, Inc. is not entitled to summary judgment against Ivey’s Plumbing & Electric Company, Inc.33