Southwestern Stationery and Bank Supply, Inc., an Oklahoma Corporation v. Harris Corporation, a Delaware Corporation

624 F.2d 168, 29 U.C.C. Rep. Serv. (West) 57, 1980 U.S. App. LEXIS 16227
CourtCourt of Appeals for the Tenth Circuit
DecidedJune 27, 1980
Docket78-1756
StatusPublished
Cited by20 cases

This text of 624 F.2d 168 (Southwestern Stationery and Bank Supply, Inc., an Oklahoma Corporation v. Harris Corporation, a Delaware Corporation) is published on Counsel Stack Legal Research, covering Court of Appeals for the Tenth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Southwestern Stationery and Bank Supply, Inc., an Oklahoma Corporation v. Harris Corporation, a Delaware Corporation, 624 F.2d 168, 29 U.C.C. Rep. Serv. (West) 57, 1980 U.S. App. LEXIS 16227 (10th Cir. 1980).

Opinion

McKAY, Circuit Judge.

In this diversity action, plaintiff Southwestern seeks damages from Harris for breach of a sales contract. Following a jury verdict for Southwestern, the district court entered a judgment notwithstanding the verdict for Harris. Southwestern appeals.

Southwestern wished to purchase a used printing press from Harris. Following a series of pre-offer contacts, including contacts with a third-party owner of the press, Harris sent Southwestern several copies of a Harris purchase order for the press and also supplied instructions for submitting the order. On April 29, 1976, Southwestern completed the purchase order and forwarded four copies with both a downpayment check and an irrevocable letter of credit for the balance of the purchase price. After a communications hiatus, Harris notified Southwestern on June 10 that the third party would not release possession of the press. Harris returned the uncashed check, the letter of credit, and three copies of the purchase order, none of which bears any Harris notations of acceptance. 1 Southwestern then purchased a comparable new press and instituted this action.

I.

The primary dispute centers on the meaning of the acceptance clause language found on the back of the Harris purchase order. That clause reads:

This order is subject to acceptance by Seller at its home office written herein. Thereupon, Seller shall mail to Purchaser a signed duplicate copy hereof, and the same shall constitute the entire contract between the parties, which shall be changed only by written agreement of the parties. The contract and the notes given hereunder shall be governed by the laws of the State of Ohio. Purchaser has *170 retained a copy of this order as signed by it.

The banking by Seller or other disposition of funds paid by Purchaser to Seller or the disposition by Seller of any trade-in equipment offered by Purchaser to Seller hereunder shall not constitute an acceptance of this order by Seller. Record, vol. 1, at 6. In addition, the purchase order includes on its face the following signature block:

This order is hereby accepted and dated at Seller’s Cleveland, Ohio, Office on_ HARRIS CORPORATION, a Delaware Corporation Sheet Fed Press Division, Seller
By-

Id. at 5. Southwestern argues that the method of acceptance is not made explicit by the document and therefore, under the governing Uniform Commercial Code, any reasonable means of acceptance will suffice. See Okla.Stat.Ann. tit. 12A, § 2-206. 2

The district court initially agreed that the acceptance clause is ambiguous, and the court therefore submitted the contractual existence question to the jury. Upon consideration of the motion for judgment notwithstanding the verdict, however, the court reversed itself, holding that the clause requires written acceptance by Harris. The court concluded that, in the absence of written acceptance, judgment for Harris was mandated.

Because this court has the purchase order before it, we are not limited to reviewing the trial court’s contractual interpretation under the “clearly erroneous” standard. See DeBoer Construction, Inc. v. Reliance Insurance Co., 540 F.2d 486, 495 (10th Cir. 1976); Rockwood & Co. v. Adams, 486 F.2d 110, 112 (10th Cir. 1973). An expanded scope of review is particularly justifiable when the only question is whether contractual terms are, on their face, ambiguous. See Holtze v. Equitable Life Assurance Society, 548 F.2d 1037, 1042 (D.C. Cir. 1976).

We conclude that the trial court was correct in deciding that, read as a whole, the purchase order is unambiguous in specifying the proper method of acceptance. Any well-trained lawyer can, of course, create ambiguities in interpreting even the most straightforward of sentences. To uphold the judgment notwithstanding the verdict, we need not decide that only one interpretation of the clause is imaginable; it is sufficient that only one is reasonable.

Southwestern focuses on the initial sentence of the acceptance clause. That sentence requires Harris’ acceptance but specifies no method. Under the Southwestern theory, the second sentence, requiring the mailing to Southwestern of a signed duplicate copy, delineates a procedure to be followed after acceptance has otherwise been effected. The introductory word “thereupon” merely orders the steps in the transaction.

Read out of context, the two sentences may suggest ambiguity. However, read in conjunction with the remainder of the purchase order, the particular terms are not lacking in clarity. Ambiguity does not exist merely because care must be exercised in reading the provisions. Nor does the trial judge’s vacillation in interpreting the acceptance clause’s meaning in itself indicate the existence of ambiguity as a matter of law. The signature block clearly requires a Harris signature for the contract to be “hereby accepted.” That language is subject to only one reasonable interpretation.

We are also unpersuaded by Southwestern’s contention that, because the acceptance clause specifically negates one method of acceptance — i.e., Harris’ disposition of funds or trade-in equipment — any other reasonable method of acceptance was necessarily permissible. The negation clause simply permits Harris to take reasonable security precautions without attachment of further liability. The prudent addition of this precise clause does not make the remainder of the contract less clear.

*171 It is true that the Uniform Commercial Code was designed to substitute standards of reasonableness for the overly formalistic rules of commercial common law. Nevertheless, parties retain their power to require specific methods of acceptance. Any other “reasonable manner of acceptance” is sufficient only if the parties have not “otherwise unambiguously indicated by the language or circumstances.” Okla.Stat.Ann. tit. 12A, § 2-206(l)(a). Here Harris unambiguously indicated the method of acceptance. 3

II.

The district court did not permit Southwestern to amend its pleadings to conform to evidence that, in Southwestern’s view, supported theories of fraud, oral contract and implied contract. Although the pretrial order unquestionably contemplated only the written contract claim, Southwestern argues that the court abused its discretion in refusing the amendment.

Pretrial orders provide the parties and the court with a basic understanding of the issues to be tried. The terms of the order are not absolute, however, and amendments to the pleadings may be permitted under the liberal terms of Fed.R. Civ.P.

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624 F.2d 168, 29 U.C.C. Rep. Serv. (West) 57, 1980 U.S. App. LEXIS 16227, Counsel Stack Legal Research, https://law.counselstack.com/opinion/southwestern-stationery-and-bank-supply-inc-an-oklahoma-corporation-v-ca10-1980.