Pleading-Stage Pathways Around the UCC Statute of Frauds: Joint Counsel’s Email May Qualify as a Merchant’s Confirmation, and Pre‑Closing Control May Constitute Receipt and Acceptance

Introduction

In Palmer's Grocery Inc. d/b/a Palmer's Shoppers Value Foods, Jason Palmer and Damon Palmer v. Chandler's JKE, Inc., Robert W. Chandler, Jr., and Josey Chandler, the Supreme Court of Mississippi reversed a Rule 12(b)(6) dismissal that had extinguished the plaintiffs’ contract-based and related claims under the Uniform Commercial Code’s Statute of Frauds (Miss. Code Ann. § 75-2-201). The case arises out of an oral, handshake agreement for the sale of a grocery store’s inventory and equipment for $175,000 to another set of grocers operating under the same Shoppers Value Foods brand.

The core dispute is whether, despite the lack of a signed, final asset purchase agreement, the plaintiffs plausibly alleged facts that bring the transaction within two UCC exceptions to the Statute of Frauds:

The merchants’ confirmation exception (Miss. Code Ann. § 75-2-201(2)); and
The part-performance exception for goods received and accepted (Miss. Code Ann. § 75-2-201(3)(c)).

The trial court had dismissed the breach of contract, implied contract, good faith, tortious breach, estoppel, and negligent misrepresentation claims, among others, on Statute of Frauds grounds. On interlocutory appeal, the Mississippi Supreme Court held that the complaint plausibly invokes both exceptions—and therefore the claims should proceed beyond the pleading stage.

Summary of the Opinion

Applying de novo review, the Court acknowledged that the alleged transaction is a sale of goods over $500 and thus falls within § 75-2-201(1). Although no signed contract existed, the Court held the complaint plausibly invokes:

The § 75-2-201(2) merchants’ confirmation exception, potentially satisfied by an email from the parties’ jointly retained attorney (Michael Gratz) that “confirm[ed] the basic agreement” (purchase of “existing Inventory and equipment” for $175,000) and was sent to both sides the day of the handshake;
The § 75-2-201(3)(c) part-performance exception, because the complaint alleges facts that, if proven, could show the buyers “received and accepted” the goods by exercising control and taking actions inconsistent with the seller’s ownership (directing the store’s closure, instructing disposal or freezing of perishables, meeting employees and distributing handbooks).

Because those exceptions are plausibly alleged, the Court reversed the dismissal of claims (1) through (7)—breach of contract, implied contract, good faith and fair dealing, tortious breach, promissory estoppel, equitable estoppel, and negligent misrepresentation—and remanded for further proceedings. The negligence-based emotional distress, joint and several liability, and attorneys’ fee claims were already pending in the trial court and remain so.

Analysis

Precedents Cited and Their Influence

Statute of Frauds and UCC framework: The Court reiterated the baseline rule of Miss. Code Ann. § 75-2-201(1) that contracts for the sale of goods priced at $500 or more require a writing signed by the party to be charged. It then turned to two UCC exceptions.
Dawkins & Co. v. L & L Planting Co., 602 So. 2d 838 (Miss. 1992): The Court adopted Dawkins’ five-part test for the § 75-2-201(2) “between merchants” confirmation exception, which requires:
1. Both parties are merchants;
2. A writing in confirmation of the contract, sufficient against the sender;
3. Receipt of the writing within a reasonable time;
4. Reason to know its contents; and
5. No written objection within 10 days.
Dawkins relied in turn on federal and sister-state decisions such as Perdue Farms, Inc. v. Motts, Inc. of Miss., 459 F. Supp. 7 (N.D. Miss. 1978), Doral Hosiery Corp. v. Sav-A-Stop, Inc., 377 F. Supp. 387 (E.D. Pa. 1974), and A & G Constr. Co. v. Reid Bros. Logging Co., 547 P.2d 1207 (Alaska 1976). These authorities collectively support a pragmatic, commerce-oriented application of § 2-201(2).
Rule 12(b)(6) standard: State v. Bayer Corp., 32 So. 3d 496 (Miss. 2010) and Howard v. Estate of Harper, 947 So. 2d 854 (Miss. 2006) guide that at the dismissal stage courts accept well-pleaded facts as true and do not resolve factual disputes, dismissing only when it “appears beyond reasonable doubt” no set of facts would entitle relief. That standard drove the Court’s decision to let merchant-confirmation and part-performance theories proceed to factual development.
Contract formation elements: The Court cited Logan v. RedMed, LLC, 377 So. 3d 956 (Miss. 2024), quoting LAGB, LLC v. Total Merchant Services, Inc., 284 So. 3d 720 (Miss. 2019), for the elements of contract formation. The complaint’s allegations (offer, acceptance, meeting of the minds, consideration) plausibly satisfy “valid in other respects,” the first prong of § 75-2-201(3).

Legal Reasoning

1) Merchants’ Confirmation (UCC § 2-201(2))

The dispositive question is not whether the email from joint counsel does satisfy § 2-201(2), but whether the complaint plausibly alleges facts that could satisfy it. That distinction matters under Rule 12(b)(6).

The Court identified two intertwined factual issues that cannot be resolved on the pleadings:

Agency and the “sender” requirement: The statute requires a “writing in confirmation of the contract sufficient against the sender.” The email was authored and signed by Attorney Gratz, jointly retained by both sides. The Court noted the absence of case law addressing whether a jointly retained lawyer can qualify as the “sender’s” agent under § 2-201(2). Rather than decide that novel issue on the pleadings, the Court held the agency question is for the trier of fact in light of the complaint’s allegations that Gratz represented both parties and “confirm[ed] the basic agreement.”
Content of the writing and 10-day objection: The email states that “for $175,000 Jos[e]y Chandler will purchase from Palmer’s Inc. all right title and interest to the existing Inventory and equipment,” that earnest money was under discussion, and that counsel expected to “finaliz[e] everything next week.” Whether this is a “writing in confirmation of the contract” and “sufficient against the sender” (including signature and quantity sufficiency) are matters not suitable for dismissal. Further, whether the Chandlers objected in writing within 10 days is a factual issue; the pleaded timeline suggests they did not object in writing until after that period elapsed.

Because it does not “appear beyond reasonable doubt” the plaintiffs will be unable to prove facts satisfying the Dawkins/§ 2-201(2) elements, the claim survives a 12(b)(6) motion.

2) Part-Performance by Receipt and Acceptance (UCC § 2-201(3)(c))

The Court announced a clear two-prong framework drawn directly from the statute:

The (oral) contract must be “valid in other respects” (i.e., meet common-law formation elements apart from the writing requirement); and
The goods at issue must have been “received and accepted.”

As to prong one, the complaint sufficiently alleges offer, acceptance, consideration, and a meeting of the minds (including closing the store and adjusting inventory at the buyers’ request). That suffices at the pleading stage.

As to prong two, the Court flagged a fact-intensive question: did the Chandlers “receive and accept” the goods? The complaint alleges the Chandlers:

Directed the Palmers to close the grocery;
Directed the disposition or preservation of perishables; and
Met with employees at the closed store and distributed handbooks.

These are plausibly “acts inconsistent with the seller’s ownership” (language reminiscent of UCC § 2‑606 on acceptance), but whether they also satisfy “receipt” (ordinarily physical possession) and “acceptance” as to “inventory, stock, and equipment” is a factual question unsuitable for dismissal. Importantly, the Court noted Mississippi had not previously addressed § 2-201(3)(c); by setting out the two-prong test and applying the Rule 12(b)(6) lens, the Court establishes the framework for future adjudication.

3) Collateral Claims: Estoppel and Negligent Misrepresentation

The trial court had dismissed promissory and equitable estoppel on the view that they could not be used to end-run the Statute of Frauds. The Supreme Court reversed that dismissal because the applicability of the Statute of Frauds itself remains unresolved given the plausible exceptions. If the exceptions apply, the estoppel claims are not barred at the threshold. Likewise, dismissal of negligent misrepresentation (on the ground it was an unactionable promise of future conduct) was premature, because whether a contract existed and the nature of any representations (including the assertion that SuperValu approval was not required) are factual questions intertwined with disputed issues the court cannot resolve on a motion to dismiss.

Impact and Implications

Doctrinal Significance

First Mississippi articulation of § 2-201(3)(c) framework: The Court expressly noted it had not previously addressed the “received and accepted” exception. By recognizing the two-prong test and holding that operational control and direction can plausibly constitute receipt-and-acceptance, the decision opens a viable path for part-performance arguments in sale-of-goods disputes where formal writings are incomplete.
Expanded plausibility for § 2-201(2) in modern practice: The Court signaled that a confirmatory email—even from joint counsel—may suffice as a “writing in confirmation … sufficient against the sender” if agency and content elements are proven. This pushes merchant parties to treat post-negotiation emails with care and to timely object in writing within the UCC’s 10-day window.
Pleading-stage restraint: The decision underscores that Statute of Frauds defenses often turn on disputed factual predicates (agency, signature/authentication, quantity sufficiency, receipt/acceptance) ill-suited for early dismissal. Practically, litigants should expect more § 2-201 cases to proceed to discovery when colorable exceptions are pleaded.

Practical Takeaways for Commercial Parties

Emails count: Confirmation emails contemporaneous with a handshake deal can have legal effects. Merchants who receive one must send a written objection within 10 days or risk satisfying § 2-201(2) against themselves.
Joint counsel risk: Using one lawyer to “paper” both sides may unintentionally satisfy the “sender” requirement if agency can be shown. Parties should clarify in writing whether counsel is authorized to bind either side for § 2-201 purposes.
Operational control can be costly: Steps like directing inventory handling, shutting down operations, or managing employees may be viewed as acts inconsistent with the seller’s ownership, supporting § 2-201(3)(c) acceptance. Counsel should calibrate pre-closing actions and document their conditional nature.
Quantity and identification: Descriptions such as “all existing inventory and equipment” can function as a UCC quantity term in some contexts. Parties should draft confirmations with clear identification to avoid avoidable disputes.

Complex Concepts Simplified

UCC Statute of Frauds (§ 2-201): A safeguard against fraudulent claims of oral sales contracts for goods priced $500 or more. It generally requires a signed writing but includes key exceptions recognizing how merchants actually do business.
Merchants’ confirmation (§ 2-201(2)): Between merchants, a confirmation sent by one party can bind the other unless the recipient sends a written objection within 10 days. The confirmation must be “sufficient against the sender” (i.e., it would satisfy § 2-201(1) as to the sender, including signature and quantity).
Part-performance: “received and accepted” (§ 2-201(3)(c)): Even without a writing, an oral contract is enforceable for goods the buyer has received (typically, physical possession) and accepted (e.g., by acting inconsistently with the seller’s ownership or failing to reject after inspection). Mississippi now recognizes a two-prong test: (1) contract valid otherwise, and (2) receipt plus acceptance of the goods.
“Sufficient against the sender”: The confirmation must be signed by, or on behalf of, the party sending it, and contain enough to indicate a contract for sale has been made, including a quantity term (which can sometimes be expressed generically, like “all inventory on hand”).
Rule 12(b)(6) standard: At the motion to dismiss stage, courts accept the complaint’s facts as true and ask only whether it’s plausible the plaintiff could prove a set of facts entitling relief. Close factual questions are for later, not for dismissal.
Merchant: Under the UCC, someone who deals in goods of the kind or otherwise holds themselves out as having knowledge or skill peculiar to the goods or practices involved. Grocery operators selling and buying store inventory and equipment readily fit this definition.

Unresolved Questions for Remand

Agency of joint counsel: Was Attorney Gratz acting as an authorized agent of one or both parties such that his email is “sufficient against the sender”?
Signature and authentication: Does the email satisfy UCC signature requirements (including electronic signatures) as to the putative sender?
Quantity sufficiency: Is “all existing inventory and equipment” a sufficient quantity description under Mississippi UCC jurisprudence in this context?
10-day objection: Did the Chandlers send a written objection within 10 days of the email? The pleaded timeline suggests not, but proof may be contested.
Receipt and acceptance: Did the Chandlers “receive” the goods (take physical possession) and “accept” them (e.g., act inconsistently with the seller’s ownership) within the meaning of the UCC? The alleged control over operations suggests acceptance; evidence of receipt may turn on possession and control facts.
Scope of “goods”: The transaction involved inventory and equipment (goods), plus lease assignment issues (non-goods). The predominant purpose appears to be goods, but the parties may litigate the scope and separability of obligations.

Conclusion

Palmer’s Grocery marks an important development in Mississippi commercial law. The Supreme Court:

Affirmed that at the Rule 12(b)(6) stage, courts must not resolve fact-intensive Statute of Frauds issues when plaintiffs plausibly allege UCC exceptions;
Recognized—apparently for the first time in Mississippi—the two-prong pathway for § 2-201(3)(c) part-performance (valid contract otherwise; goods received and accepted), signaling that operational control and pre-closing conduct may suffice for acceptance and potentially receipt; and
Confirmed that a joint-counsel email can, at least plausibly, function as a merchants’ confirmation under § 2-201(2), leaving agency and sufficiency to evidentiary development.

The decision shifts much of the Statute of Frauds litigation for merchant sales of goods out of the pleading stage and into discovery and trial. Merchants should treat confirmatory emails and pre-closing operational steps with the same caution as formal writings, promptly lodge written objections when appropriate, and delineate agency authority with counsel to control unintended binding effects. Going forward, Palmer’s Grocery will likely be the leading Mississippi authority cited whenever parties invoke § 2-201’s exceptions at the outset of litigation.