Opinion
Civil Action No. 3:99-CV-0665-BC.
January 8, 2001.
MEMORANDUM OPINION AND ORDER
Before the Court are Defendant BancTec's Motion for Partial Summary Judgment, Plaintiff Sanmina's Motion for Partial Summary Judgment, both filed October 19, 2000, and the responses and replies to both motions, and BancTec's Motion for Leave to File Supplemental Appendix of Evidence in Support of BancTec's Motion for Partial Summary Judgment filed November 28, 2000. For the reasons stated below, the motions are GRANTED in part and DENIED in part.
Many of the facts, characterizations of the facts, and legal effect of the facts of this case are disputed by the parties. However, the facts that form the basis of the Court's ruling, as set forth in this section, are essentially undisputed.
Unless otherwise indicated, appendices cited in this opinion refer to the appendices filed in conjunction with the initial brief, response, and reply to BancTec's motion.
A. The "Corporate Option Agreement"
Plaintiff Sanmina Corporation ("Sanmina"), the seller in this contract dispute, manufactures printed circuit board assemblies ("PCBAs"). Defendant BancTec USA ("BancTec"), the buyer, uses PCBAs to manufacture check reader-sorters. In late 1995 or early 1996, BancTec decided to transfer production of PCBAs from BancTec's Puerto Rico facility to an outside domestic supplier. BancTec identified Sanmina as a potential supplier of PCBAs. On April 11, 1996, after several weeks of meetings, discussions, and negotiations, Sanmina and BancTec executed a document titled "Corporate Option Agreement." (BancTec's App. pp. 25-31.)
The Corporate Option Agreement ("COA") states that Sanmina "grants to [BancTec] a continuing option to purchase, in whole or in part, the items listed herein" in accordance with certain terms and conditions. (BancTec's App. p. 25.) The COA permits BancTec to exercise the option to purchase PCBAs as many times as desired during a three-year term by issuing purchase orders. The COA did not obligate BancTec to issue purchase orders, nor did it prohibit BancTec from obtaining PCBAs from other suppliers.
BancTec subsequently issued 73 purchase orders for various quantities and part numbers, all of which were acknowledged by Sanmina. (BancTec's App. pp. 128-426.) It is not clear to what extent these orders were actually filled or to what extent payment was made, however it is undisputed that the estimated value of the orders placed by BancTec was $6.5 million. (Sanmina's Resp. at 9; BancTec's Reply at 23.)
In its response, Sanmina requests the Court strike the Patti Seitz Scott affidavit (BancTec's App. pp. 539-42) which authenticates the purchase orders and corresponding acknowledgments in BancTec's appendix. Sanimina's request is based on the objection that affiant states she is personally "acquainted" with the facts stated in the affidavit rather than stating that such facts are personally "known" to her. This objection is without merit and is overruled. Furthermore, Sanmina does not deny that BancTec issued the purchase orders or that the orders were acknowledged.
It is also undisputed that the relationship was far from satisfactory for either party. BancTec claims that Sanmina had difficulty meeting product specifications and delivery dates, and that the prices Sanmina charged were not in accordance with the parties' agreement.
Sanmina alleges that BancTec led it to believe that PCBA operations would be transferred gradually from the Puerto Rico facility over an 18 to 24-month period, when in fact, BancTec knew that the transition would be completed in only six months, thus allowing Sanmina insufficient time to gear up its operations. Sanmina also alleges that the design drawings provided by BancTec were incomplete and technically inadequate to permit Sanmina to perform. Furthermore, according to Sanmina, the PCBAs BancTec ordered pursuant to the purchase orders were not the same type of PCBAs that BancTec supplied for bidding purposes during COA negotiations. Sanmina claims that, instead, BancTec ordered PCBAs requiring obsolete and difficult-to-find parts.
B. The "Contract for Usage"
Sanmina claims that it purchased large quantities of outmoded component materials in reliance on orders that BancTec issued or promised to issue. Sanmina also claims that the parties met to discuss the problem of excess inventory and that they came to an agreement to use the accumulated inventory over time. This agreement, according to Sanmina, was reduced to a writing called the "Contract for Usage of BancTec Related Inventory at Sanmina" ("CFU"). The CFU required BancTec to deplete Sanmina's inventory over a 24-month period by issuing orders for PCBAs that utilized the accumulated parts. (Sanmina's App. pp. 112-13.) Under the CFU, the parties would "split the liability" for any inventory remaining upon the expiration of the CFU term. (Sanmina's App. pp. 112-13.)
A draft of the CFU was sent to BancTec for review in the fall of 1997. The draft CFU was reviewed by BancTec's legal department and returned to Sanmina marked with minor changes. (Sanmina's App. pp. 118-20.) Sanmina incorporated the changes. The revised CFU was signed by Sanmina's corporate representative, Michael Landy, on January 5, 1998, and returned to BancTec. BancTec's corporate representative, James Uren, signed the CFU on January 19, 1998. (Sanmina's App. pp. 112-13.) However, BancTec never delivered the fully-executed document to Sanmina, nor did it make Sanmina aware that the CFU had been signed. In fact, Sanmina did not learn that BancTec had signed the CFU until the document was produced during discovery pursuant to this litigation.
C. Motions for Partial Summary Judgment
The core of this dispute is that BancTec has refused to place enough orders to exhaust the inventory that Sanmina claims was ordered on BancTec's behalf. By this lawsuit, Sanmina seeks to recover from BancTec approximately $2 million for the excess inventory plus an additional $1.5 million for incidental costs. (Pl.'s Original Compl. ¶ 20.) BancTec claims that, under the COA, it is not required to purchase any items from Sanmina. For its part, Sanmina denies that the COA is a valid contract; Sanmina claims that the CFU, instead, governs the relationship between the parties.
In its motion for partial summary judgment, Sanmina requests a declaration from the Court holding the COA invalid and unenforceable and to establish the CFU as a valid contract governing the relationship between the parties. BancTec opposes both requests.
Before turning to the merits, the Court will review the applicable legal standards.
II. LEGAL STANDARDS
Under Rule 56(c) of the Federal Rules of Civil Procedure, summary judgment is appropriate when the pleadings and the record evidence show that no genuine issue of material fact exists and that, as a matter of law, the movant is entitled to judgment. Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994). "[T]he substantive law will identify which facts are material." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Only disputes about material facts will preclude the granting of summary judgment. Id . In a motion for summary judgment, the burden is on the movant to prove that no genuine issue of material fact exists. Latimer v. Smithkline French Lab., 919 F.2d 301, 303 (5th Cir. 1990).
Once the movant makes this showing, the burden shifts to the non-movant to show that summary judgment is not appropriate. Little, 37 F.3d at 1075 (citing Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986)) . "This burden is not satisfied with 'some metaphysical doubt as to the material facts . . . by conclusory allegations . . . by unsubstantiated assertions, or by only a scintilla of evidence.'" Id. (quotation marks omitted) (quoting Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986)) . Rather, the non-moving party must "come forward with 'specific facts showing that there is a genuine issue for trial.'" Matsushita, 475 U.S. at 584 (quoting FED.R.CIV, P. 56 (e)).
III. ANALYSIS
A. The Corporate Option Agreement
Sanmina offers three reasons that the COA is invalid or unenforceable: (1) the COA is invalid because there was no meeting of the minds; (2) the COA is unenforceable because it is vague, indefinite, and uncertain; and (3) the COA fails for lack of consideration. The Court finds none of these arguments persuasive.
Because the case is before the Court on diversity jurisdiction, Texas law supplies the applicable substantive authority. H.E. Butt Grocery Co. v. National Union Fire Ins. Co. of Pittsburgh, PA, 150 F.3d 526, 529 (5th Cir. 1998). The Texas version of the Uniform Commercial Code ("UCC") applies because this case involves transactions in goods. Tex. Bus. Com. Code Ann. § 2.102 (Vernon 1994).
1. Contract formation: Meeting of the Minds
Under the UCC, a contract for the sale of goods may be made in any manner sufficient to show agreement. Tex. Bus. Com. Code Ann. § 2.204(a). A binding contract, whether written or oral, exists when each of the following elements are established: (1) offer; (2) acceptance; (3) meeting of the minds; (4) communication that each party has consented to the terms of the agreement; and (5) execution and delivery of the contract with the intent that it become mutual and binding on both parties. McCulley Fine Arts Gallery, Inc. v. "X" Partners, 860 S.W.2d 473, 477 (Tex.App.-El Paso 1993, no writ). The only element contested by Sanmina is meeting of the minds.
"Whether a contract exists involves both questions of fact — such as the intent of the parties — and questions of law — such as whether, the facts as found constitute a contract." Zimmerman v. H.E. Butt Grocery Co., 932 F.2d 469, 471 (5th Cir. 1991). When a written agreement is presented, a court's primary concern is to give effect to the true intentions of the parties as expressed in the writing. Burns v. Exxon Corp., 158 F.3d 336, 340 (5th Cir. 1998). Absent ambiguity, the writing alone will be deemed to express the intention of the parties, and objective intent rather than subjective intent controls. Burns, 158 F.3d at 340 . "The intent of the parties to be bound is an essential element of an enforceable agreement and is often a question of fact. However, where that intent is clear and unambiguous on the face of the agreement, it may be determined as a matter of law." John Wood Group USA, Inc. v. ICO, Inc., 26 S.W.3d 12, 16 (Tex.App. — Houston [1st Dist.] 2000, no pet. h.).
Although the issue in Burns was contract interpretation as opposed to contract formation, the Court finds the standards for interpreting a written agreement that it articulates applicable here because both parties point to the COA as the document demonstrating their intent, or lack thereof, to contract. Thus, the issue is purely a question of law: whether the COA is unambiguous, and if so, whether it demonstrate an intent to contract.
Resolution on summary judgment of whether the COA is a contract is appropriate in this case because the facts relevant to the Court's inquiry are undisputed. Essentially, the parties disagree on the interpretation and significance of the COA. Sanmina argues that the parties did not come to a meeting of the minds on the essential terms of the agreement, thus, a contract was not formed. According to Sanmina, the failure of the parties to agree is evidenced by numerous errors and omissions in the COA. BancTec, on the other hand, contends that the COA unambiguously demonstrates the parties' intent to enter a binding contract.
The Court concludes that the language of the COA is unambiguous in demonstrating that the parties' entered into a binding contract. Review of a few passages suffices to illustrate. The introductory paragraph states:
This Agreement sets forth the understandings reached by the parties to this Agreement during negotiations concerning the items and work listed herein. Seller hereby grants to . . . BancTec a continuing option to purchase, in whole or in part, the items listed herein in accordance with the following terms and conditions. (BancTec's App. p. 26.)
The COA further provides that BancTec would exercise the option by issuing purchase orders which Sanmina agreed to honor by delivering the goods to BancTec's docks on dates to be specified in the purchase orders and at prices at least as low as those offered to other customers. (BancTec's App. at 26-27, COA ¶¶ 2-5.) The COA also contemplated remedies for BancTec in the event of breach by Sanmina. (BancTec's App. at 29, COA ¶ 13.) The COA contains an integration clause that expressly states that it supersedes all previous communications and agreements. (BancTec's App. at 30, COA ¶ 16.) Finally, the document is signed and "approved by" both Michael Landy, Sanmina's Vice President of Texas Operations, and Raymond Foster, BancTec's Director of Materials.
The Court's review of the COA is directed solely at discerning the intent of the parties as it relates to contract formation. The Court does not express any opinion on the meaning of specific terms or the obligations imposed on the parties — issues that are not currently before the Court.
In view of the unambiguous language of the COA, Sanmina's argument that it did not intend to enter into a legally-binding contract is without merit. The only reasonable interpretation of the COA is that the parties mutually agreed to enter into a binding relationship with enforceable obligations. Sanmina's characterization of the COA as merely a "guideline" is unpersuasive. The Court concludes that the COA evidences a valid contract.
2. The COA does not fail for indefiniteness
Sanmina also argues that no contract was formed because the COA is vague, indefinite, and uncertain, and contains errors. Sanmina's arguments focus primarily on alleged shortcomings in the COA document. However, the document itself does not have to specify every term in order for the contract it evidences to be enforceable. Furthermore, courts should be reluctant to hold a contract void for uncertainty. Engelman Irrigation Dist. v. Shields Bros., Inc., 960 S.W.2d 343, 352 (Tex.App. — Corpus Christi 1998, pet. denied).
A contract does not fail for indefiniteness — even though one or more terms are left open — if the parties have intended to make a contract and there is a reasonably certain basis for giving an appropriate remedy. Tex. Bus. Com. Code Ann. § 2.204(b). The test is not certainty as to what the parties were to do, but rather whether the parties intended to enter a binding agreement. Tex. Bus. Com. Code Ann. § 2.204 cmt.
As Sanmina notes, in one paragraph, the COA mistakenly describes the goods as "custom cable assemblies" rather than PCBAs, and in another refers to BancTec as "Recognition International." (BancTec's App. p. 26, COA ¶ 2.) Sanmina thus contends that no contract was formed because the goods contemplated and the description of the parties are not sufficiently definite to permit the Court to interpret the COA.
However, it is well-established in Texas that a contract does not fail for uncertainty merely because it contains typographical errors and omissions. Ussery Inv. v. Canon Carpenter, Inc., 663 S.W.2d 591, 593 (Tex.App.-Houston [1st Dist.] 1983, writ dism'd). Instead, the court must peruse the entire document and interpret it according to the intention of the parties, notwithstanding typographical errors and omissions.
It is clear from the COA as a whole that the parties are BancTec and Sanmina, and the commodity contemplated is PCBAs. Moreover, despite typographical errors, there was no actual confusion regarding the parties to the agreement or the subject matter of the COA; Sanmina does not contend, for example, that it thought it was to provide custom cable assemblies instead of PCBAs, or that the buyer was anyone other than BancTec. Thus, the errors are merely typographical errors and were recognized as such by both parties. These errors do not cause the COA to fail for indefiniteness.
Sanmina also alleges that the COA must fail because its attachments were missing when it was signed. According to Sanmina, Attachment A, which purportedly would have identified the part numbers and prices, was never attached to the COA, nor were Attachments B and C, also referenced by the COA. BancTec points to evidence that suggests Attachments A and B were present and that Attachment C was deemed unnecessary. Thus, there is conflicting evidence in the record regarding whether the attachments were present when the COA was signed and what they contained or were intended to contain.
Assuming for purposes of this motion that the attachments were missing, lack of attachments is not fatal to the contract. The COA is sufficiently definite without them to indicate that a contract has been formed. Although the exact PCBA specifications and part numbers were left open, it is clear from the language of the COA that the intent of the parties was to permit flexibility in the specifications. In paragraph 6, under the heading "Specification, " the COA states: "Seller shall deliver the goods in accordance with the specifications referenced in Attachment A, unless otherwise specified in BancTec's purchase order(s)." (BancTec's App. p. 28, COA ¶ 6 (emphasis added)) Thus, the parties contemplated that PCBA specifications would be set forth either in Attachment A or in BancTec's purchase orders. Even if Attachment A had been included, BancTec was free to alter the specifications on Attachment A in its purchase orders. Having agreed to grant BancTec option the option to issue purchase orders, Sanmina cannot now complain that this provision renders the COA indefinite.
According to Sanmina, the COA cannot be enforced because the "precise terms and conditions" are missing. However, the COA itself together with the purchase orders are sufficiently definite to indicate that a binding obligation has been undertaken, and the missing or nonexistent attachments are superfluous to this conclusion. The mere fact that they were not attached does not render the contract uncertain, especially in light of the conclusion that the COA standing alone evidences the parties' intent to enter a binding contract. As long as the parties have sufficiently demonstrated their intent to form a contract, the UCC makes provision for missing terms needed for performance. Tex. Bus. Com. Code Ann. § 2.204 cmt.
According to Sanmina, the contract is also unenforceable because it leaves the quantity term entirely optional with BancTec. However, the cases cited by Sanmina in support of the proposition that a contract must contain a quantity term if it is to be held enforceable are inapplicable here. The cases did not involve either the UCC or option contracts. See Mesa Agro v. R.C. Dove Sons, 584 S.W.2d 506 (Tex.App.-El Paso 1979, writ ref'd n.r.e.); Miller v. Vaughn Taylor Constr. Co., 345 S.W.2d 852 (Tex.App.-Fort Worth 1961, writ ref'd n.r.e.).
The issue of a missing quantity term in this context goes to the issue of contract formation, not the statute of frauds defense discussed below.
As discussed above, under the UCC a contract does not fail for indefiniteness despite missing terms, if there is a reasonably certain basis for granting a remedy. Tex. Bus. Com. Code Ann. § 2.204 cmt. In this case, the stated purpose of the COA is to provide BancTec the option to buy PCBAs during a three-year period by issuing purchase orders. The COA indicates that the purchase orders will specify quantity. (BancTec's App. p. 28, COA ¶ 3.) Thus, although the COA itself does not specify quantity, the term was deliberately left open by the parties with the intention of providing flexibility through purchase orders. Sanmina does not dispute that, in accordance with the COA, purchase orders subsequently issued by BancTec specified quantities. (BancTec's App. pp. 128-426.) Accordingly, the COA does not fail for lack of a quantity term.
3. The COA does not fail for lack of consideration
Finally, Sanmina claims that the COA fails for lack of consideration. The consideration recited in the COA is as follows:
The consideration for the option granted herein is the initial commitment of BancTec to purchase the items actforth [sic] in various purchase orders. (COA ¶ 3C, BancTec's App. p. 27.)
Sanmina argues that this recital of consideration fails because it cannot be reconciled with other provisions of the COA that expressly state BancTec is not required to exercise the option to issue purchase orders.
This argument fails for several reasons. First, the very nature of an option contract is that the optionee is not required to exercise the option. An option contract has two components: (1) the underlying contract which is not binding until accepted; and (2) the covenant to hold open to the optionee the opportunity to accept. Merritt-Campbell, Inc. v. RxP Prods., Inc., 164 F.3d 957, 963 (5th Cir. 1999). Thus, the COA does not fail merely because it does not impose an obligation on BancTec. BancTec does not undertake an obligation until it issues a purchase order. Second, to be binding, an option contract need only "recite a purported consideration," See Merritt-Campbell, Inc. v. RxP Prods., Inc., 164 F.3d at 964 (citing Restatement (Second) Contracts § 87 (1979)). The COA recites a purported consideration, which is all that is required.
At the Court's request, the parties submitted supplemental briefing on the application of the statute of frauds defense to this case.
The statute of frauds provides that contracts for the sale of goods for $500 or more are not enforceable unless they are evidenced by "some writing sufficient to indicate that a contract for sales has been made between the parties and signed by the party against whom enforcement is sought." Tex. Bus. Com. Code Ann. § 2.201. There are three requirements for the writing: (1) it must evidence a contract for the sale of goods; (2) it must be signed; and (3) it must specify a quantity. Id . cmt. 1. Sanmina argues that the COA does not satisfy the statute of frauds because it lacks a quantity component.
Statute of frauds is an affirmative defense that must be set forth in a party's answer. Fed.R.Civ.P. 8(c). The purpose of this requirement is to advise the court and the opposing party of the intended defense. Automated Med. Labs. v. Armour Pharm. Co., 629 F.2d 1118, 1122-23 (5th Cir. 1980). The defense must be plead with sufficient specificity sufficient to give the opposing side fair notice of the defense so as to avoid unfair surprise; in some cases, merely naming the defense is sufficient, Woodfield v. Bowman, 193 F.3d 354, 362 (5th Cir. 1999). Under the liberal pleading and amending guidelines of the federal rules, a party has ample opportunity to assert an affirmative defense, but must raise it at a time and in a manner consistent with the rules. Automated Med. Labs., 629 F.2d at 1122 . Failure to do so constitutes waiver. Woodfield, 193 F.3d at 362.; Automated Med. Labs., 629 F.2d at 1123 (statute of frauds defense not timely plead is waived).
The Court concludes that Sanmina did not timely plead the statute of frauds defense; therefore, it is waived with respect to the COA. First, Sanmina did not raise the statute of frauds defense in its answer nor did it seek to amend its answer to add the defense. On April 21, 1999 BancTec filed its Original Answer and Counterclaim, in which it asserted a counterclaim for breach of contract based on the COA. In its answer filed May 11, 1999, Sanmina plead several of the affirmative defenses required by Rule 8(c), including waiver, estoppel, fraud, and failure of consideration, but did not plead statute of frauds. The first time Sanmina alluded to the statute of frauds in a manner sufficient to put the Court and BancTec on notice is in a brief responding to BancTec's motion for partial summary judgment. (Pl.'s Resp. to Def.'s Mot. at 21.) In that response, Sanmina notes the missing quantity term and cites to Tex. Bus. Com. Code Ann. § 2.201 — the Texas codification of the UCC statute of frauds.
Second, Sanmina did not raise the defense in its motion for partial summary judgment. An affirmative defense may be raised in a motion for summary judgment, but only if that motion is the first pleading responsive to the substance of the allegations. United States v. Burzynski Cancer Research Inst., 819 F.2d 1301, 1307 (5th Cir. 1987). Even if the Court could permit Sanmina to plead statute of frauds in a motion for summary judgment, that opportunity has passed. In its motion for partial summary judgment, Sanmina asserted that the COA does not specify the quantity of goods, but that allegation was an element of Sanmina's argument that the COA fails for vagueness. The statute of frauds was not named or even cited, thus, it does not constitute fair notice that Sanmina intended to advance the defense. (Memo in Support of Pl.'s Mot. for Summ. J. at 13-14.)
The Court is aware of some cases in which a party was permitted to maintain an affirmative defense that was omitted from its answer. See Norwood v. City of Hammond, 2000 WL 235243, at * 1-2 (E.D.La. Feb. 29, 2000); Kerr v. Smith Petroleum Co., 896 F. Supp. 602, 604 (E.D.La. 1995). In those cases, indulgence was justified because of a technical mistake or because the existence of the defense was revealed during discovery. No such circumstances exist here. Sanmina has long been aware of facts that would give rise to a plausible statute of frauds defense — namely, the purported lack of a quantity term in the COA — and has had ample opportunity to raise it. Failure to do so constitutes waiver.
In its supplemental briefing, Sanmina implies that the Court may overlook waiver because this action is presented in part as a request for declaratory judgment. The Court disagrees. Framing the action as a request for declaratory judgment does not permit Sanmina to resurrect an expired defense. The Court is compelled by its understanding of the law of this circuit to declare that the statute of frauds defense has been waived.
In sum, the COA is a valid and binding contract. Accordingly, on this issue, Sanmina's motion for summary judgment is DENIED and BancTec's motion for summary is GRANTED.
5. Fraud claims
Sanmina also seeks summary judgment on BancTec's counterclaim of fraud. BancTec concedes that its fraud claims are subsumed within the parties obligations under the COA. (BancTec's Br. at 44.) Accordingly, Sanmina's motion for summary judgment on BancTec's fraud counterclaim is GRANTED.
B. The Contract For Usage
1. Contract Formation: Offer and acceptance
Sanmina seeks a declaration that the CFU is a valid and binding contract. To form a binding contract, there must be an offer and acceptance. An offer is an act that leads the offeree reasonably to believe that acceptance will conclude the deal. Axelson, Inc. v. McEvoy-Willis, 7 F.3d 1230, 1232-33 (5th Cir. 1993). Once an offer has been made, assent may manifest by written or spoken words, by actions, or even by failure to act. Hollywood Fantasy Crop. v. Gabor, 151 F.3d 203, 210 (5th Cir. 1998) (citing Fujimoto v. Rio Grande Pickle Co., 414 F.2d 648, 652 (5th Cir. 1969)). However, the party to whom the offer is made must communicate acceptance to the person making the offer, Id. (citing Engelman Irrigation Dist. v. Shields Bros., Inc., 960 S.W.2d 343, 352 (Tex.App.-Corpus Christi 1997, pet. denied)). "The mode of acceptance is inconsequential so long as it effectively makes known to the offeror that his offer has been accepted." Id . (citing Fujimoto v. Rio Grande Pickle Co., 414 F.2d 648, 652 (5th Cir. 1969)).
The Court determines that the CFU constitutes an offer by Sanmina to sell BancTec the accumulated inventory. The terms of the CFU are sufficiently specific and certain for the Court to make out the proposed obligations. The CFU is not, as BancTec argues, a settlement negotiation. There is no underlying claim that the CFU purports to settle. By drafting the CFU and sending it to BancTec, Sanmina extended an offer.
According to Sanmina, although BancTec never actually delivered the fully-executed CFU, it is nevertheless a valid and enforceable contract because delivery is not required to satisfy the statute of frauds. Sanmina's argument in essence implies that BancTec accepted the offer by signing the CFU.
The Court need not determine whether signature constitutes acceptance in this case because it is undisputed that BancTec never delivered the executed CFU to Sanmina; thus, BancTec's purported acceptance was never communicated to Sanmina. Although Sanmina is correct that delivery is not required for a writing to satisfy the statute of frauds, this point is not relevant to the issue of whether the CFU is a valid contract. The statute of frauds is a defense that serves to render unenforceable a contract that is otherwise validly formed. No contract was formed here because Sanmina never learned that BancTec had executed the CFU until afrer this litigation was well under way.
Sanmina does not claim that BancTec manifested or communicated assent either by its actions or its failure to act, so the Court does not consider those questions. Because the Court determines that the CFU is not valid as a matter of law, Sanmina's motion for summary judgment on this issue is DENIED.
2. BancTec's affirmative defenses
Sanmina moves for summary judgment on BancTec's affirmative defenses, To the extent that the affirmative defenses relate to Sanmina's breach of contract claims based on the CFU, those defenses are moot because the CFU is not a contract.
The Court reserves judgment on affirmative defenses relating to Sanmina's other claims.
III. CONCLUSION
In sum: (1) the Corporate Option Agreement is a valid and binding contract; (2) Sanmina's Motion for Summary Judgment on BancTec's fraud claims is GRANTED; (3) the Contract for Usage is not a valid and binding contract; (4) Sanmina's Motion for Summary Judgment on BancTec's affirmative defenses relating to breach of the Contract for Usage is DENIED as moot; and (5) the Court reserves judgment on any other of BancTec's affirmative defenses.
BancTec's Motion for Leave to File Supplemental Appendix of Evidence in Support of BancTec's Motion for Partial Summary Judgment filed November 28, 2000 is DENIED as moot. The Court did not rely on the evidence offered in the supplemental appendix nor on the factual representations by Sanmina that it purports to correct.