ST. ANSGAR MILLS, INC. V. STREIT
613 N.W. 2d 289 (2000)
NATURE OF THE CASE: This was an appeal from an order by the district court granting
summary judgment in an action to establish an oral contract for the sale of grain.
FACTS: St. Ansgar Mills, Inc. (P) buys corn from local grain farmers and sells corn to
livestock farmers for feed. The sales price is established by the Chicago Board of Trade for
delivery with reference to five contract months. The sale of corn for future delivery is
hedged by P through an offsetting futures position on the Chicago Board of Trade. Streit (D)
raises hogs. D and his father have been long-time customers of P. Since 1989, D entered into
numerous contracts with D for the purchase of large quantities of corn and other grain
products. D called P on the telephone to obtain a price quote. If an oral contract was made,
an employee of P would prepare a written confirmation of the sale and either mail it to D to
sign and return, or wait for D to sign the confirmation when they would stop into the
business. It was not unusual for D to fail to sign the confirmation for a long period of
time. He also failed to return contracts sent to him. D had never refused delivery of grain
he purchased by telephone prior to the incident which gave rise to this case. On July 1,
1996, D placed two orders for the purchase of 60,000 bushels of corn for delivery in
December 1996 and May 1997. P completed the written confirmation but set it aside for John
to sign when he was expected to stop by the business to pay the open account. The agreed
price of the December corn was $3.53 per bushel. The price of the May corn was $3.73 per
bushel. D failed to follow his monthly routine of stopping by the business during the month
of July. D did not stop by P until August 10, 1996. P delivered the written confirmation to
him. D refused delivery of the corn orally purchased on July 1, 1996. D purchased corn for
his hog operations on the open market at prices well below the contract prices of July 1. P
admitted it should have followed up earlier with the written confirmation and had no excuse
for not doing so. P sued for breach of contract seeking damages of $152,100; the difference
between the contract price of the corn and the market price at the time D refused delivery.
D moved for summary judgment. The written confirmation did not satisfy the statute of frauds
for two reasons. First, he was not a merchant. Second, the confirmation was not received
within a reasonable time after the alleged oral agreement. The district court found the
written confirmation did not satisfy the writing requirements of the statute of frauds
because the delivery of the confirmation did not occur within a reasonable time after the
oral contract as a matter of law. It granted D's motion. P appealed.
ISSUE:
RULE OF LAW:
HOLDING AND DECISION:
LEGAL ANALYSIS:
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