UCC Statute of Frauds Bars Unwritten Supply Commitments; No § 2-309(3) Notice Liability Without an Enforceable Contract; Course of Dealing Does Not Create a Duty to Grant Order “Rollovers”

1. Introduction

Plaintiff-Appellant Ultimate Nutrition, Inc. (“UNI”) and Defendant-Appellee Leprino Foods Company (“Leprino”) had a commercial relationship involving quarterly purchasing arrangements for goods. UNI alleged that beyond the written/express quarterly dealings, the parties formed a broader implied-in-fact “supply agreement.” UNI also claimed Leprino acted wrongfully by denying UNI’s requests to “roll over” scheduled deliveries/orders into later quarters and by terminating or winding down the relationship without reasonable notice.

The appeal presented four clusters of issues:

• Whether the alleged implied-in-fact supply agreement was unenforceable under Connecticut’s UCC statute of frauds, Conn. Gen. Stat. § 42a-2-201(1), and whether equitable estoppel could avoid that bar.
• Whether Conn. Gen. Stat. § 42a-2-309(3) (reasonable notification upon termination) creates liability even when the underlying agreement is unenforceable.
• Whether Leprino breached express quarterly contracts by refusing UNI’s “rollover” requests, including whether course of dealing imposed a good-faith obligation to approve or negotiate rollovers.
• Whether UNI could proceed on related claims for breach of the implied covenant of good faith and fair dealing and under CUTPA.

2. Summary of the Opinion

The Second Circuit affirmed summary judgment for Leprino on all counts.

• Statute of frauds: UNI did not dispute noncompliance with § 42a-2-201(1). UNI’s attempt to argue on appeal that the alleged agreement was not a “contract for sale” was forfeited. Equitable estoppel could not circumvent the statute of frauds in these circumstances, and UNI did not satisfy the UCC part-performance exception (§ 42a-2-201(3)(c)) or the common-law part-performance elements Connecticut requires for equitable estoppel.
• Termination notice: UNI could not maintain a § 42a-2-309(3) reasonable-notice claim absent an enforceable underlying contract.
• Rollovers: The course of dealing showed only that UNI could request rollovers and Leprino could decide case-by-case. Rollovers were best understood as proposed modifications under § 42a-2-209(1), which require agreement; no duty existed to agree or negotiate toward agreement merely because modifications were granted before.
• Implied covenant and CUTPA: Without impairment of contractual rights, the implied covenant claim failed; and a CUTPA claim cannot rest on a “simple contract breach” theory, particularly where the contract theories fail and no independent unethical conduct is shown.

3. Analysis

A. Precedents Cited

The panel relied on a mix of federal appellate procedure cases (standards of review and forfeiture), Connecticut Supreme Court authorities (UCC supplementation, estoppel/part performance, implied covenant), and Second Circuit CUTPA precedent.

• Rubens v. Mason, 527 F.3d 252 (2d Cir. 2008)
  Cited for the de novo standard of review of summary judgment. This framing mattered because UNI sought reversal based on legal conclusions about UCC enforceability and contract interpretation—questions the Second Circuit reviews without deference.
• In re Nortel Networks Corp. Sec. Litig., 539 F.3d 129 (2d Cir. 2008) (quoting Bogle-Assegai v. Connecticut, 470 F.3d 498 (2d Cir. 2006))
  These cases supplied the forfeiture rule: appellate courts generally will not consider issues raised for the first time on appeal. The panel used this to reject UNI’s late-breaking theory that the alleged “process” agreement was not a “contract for sale” subject to § 42a-2-201(1).
• E. River Energy, Inc. v. Gaylord Hosp., Inc., No. CV095029078S, 2011 WL 3891508 (Conn. Super. Ct. Aug. 4, 2011)
  UNI invoked this case to argue estoppel could overcome the statute of frauds. The panel distinguished it as addressing promissory estoppel (enforcing a promise absent consideration) rather than equitable estoppel, and noted Connecticut Supreme Court uncertainty about promissory estoppel’s relationship to the statute of frauds (citing Glazer, below). The opinion treats UNI’s reliance as “misplaced,” underscoring the doctrinal specificity needed when attempting to bypass § 42a-2-201(1).
• Glazer v. Dress Barn, Inc., 274 Conn. 33 (2005)
  Glazer did two kinds of work in the order:
  1. Doctrinal baseline: It supplied Connecticut’s requirement that to avoid the statute of frauds via equitable estoppel, the party must show “part performance,” and it referenced the elements needed.
  2. Doctrinal caution: In a footnote, it noted the Connecticut Supreme Court had not resolved whether promissory estoppel can enforce promises otherwise subject to the statute of frauds—helping the panel resist extending trial-level reasoning from E. River Energy.
• Bead Chain Mfg. Co. v. Saxton Products, Inc., 183 Conn. 266 (1981)
  This case anchored the UCC-preemption principle under Connecticut law: “supplemental bodies of law cannot displace those provisions of the [UCC] that are directly applicable.” The panel used it, alongside U.C.C. § 1-103(b) comment 2, to reason that the UCC’s specific statute-of-frauds exceptions (notably § 42a-2-201(3)(c)) likely displace an inconsistent equitable-estoppel end-run in these circumstances.
• M&T Bank v. Lewis, 349 Conn. 9 (2024)
  Cited for the proposition that the implied covenant of good faith and fair dealing is “implied into a contract or a contractual relationship.” This supported the conclusion that if UNI could not show enforceable contractual rights (or impairment of such rights), the covenant claim collapses.
• Capstone Bldg. Corp. v. Am. Motorists Ins. Co., 308 Conn. 760 (2013)
  Used to sharpen the limits of the implied covenant: it is “not implicated” where conduct “does not impair contractual rights.” Given the court’s holdings (no enforceable implied supply contract; no breach of express contracts by rollover denial), there was no impairment to anchor a good-faith claim.
• Boulevard Assocs. v. Sovereign Hotels, Inc., 72 F.3d 1029 (2d Cir. 1995)
  The key CUTPA precedent: “a simple contract breach is not sufficient” for CUTPA, especially where the CUTPA count merely repackages the contract claim and lacks allegations showing immoral, unethical, unscrupulous conduct or offense to public policy. The panel applied this directly: UNI’s CUTPA theory tracked its contract theories; once those failed and no additional evidence was offered, CUTPA failed as well.

B. Legal Reasoning

1) The alleged implied-in-fact supply agreement was unenforceable under § 42a-2-201(1)

UNI effectively conceded that the alleged implied-in-fact supply agreement lacked the writing required by Conn. Gen. Stat. § 42a-2-201(1). Rather than contesting that deficiency, UNI tried two alternate routes: (i) reframing the agreement as outside the statute; and (ii) asserting equitable estoppel.

The court disposed of the reframing argument procedurally (forfeiture) and the estoppel argument substantively:

• UCC displacement of inconsistent common law: Relying on U.C.C. § 1-103(b) comment 2 and Bead Chain Mfg. Co. v. Saxton Products, Inc., the panel agreed with the district court that § 42a-2-201(3)(c) likely occupies the field for part-performance-type enforcement of unwritten Article 2 contracts in the circumstances presented.
• No part performance within § 42a-2-201(3)(c): The statutory exception enforces the unwritten contract only “with respect to goods for which payment has been made and accepted or which have been received and accepted.” UNI sought broader enforcement, not tied to paid-for/accepted goods.
• No common-law equitable estoppel showing (even if available): Under Glazer v. Dress Barn, Inc., Connecticut requires part performance to invoke equitable estoppel to avoid the statute of frauds. The panel found no material fact issue on part performance under that doctrine.

2) § 42a-2-309(3) does not create an independent damages claim without an enforceable contract

UNI attempted to decouple “reasonable notification” from enforceability, arguing that Comment 4 to § 42a-2-201 contemplates that a statute-of-frauds-defective contract is not “void for all purposes.” The panel rejected that move by differentiating:

• Collateral legal consequences (e.g., possession not being trespass; third-party inducement not protected), which Comment 4 illustrates; from
• Affirmative contract damages claimed by one contracting party against the other, which would require “judicial enforcement of the agreement in UNI’s favor.”

Because § 42a-2-309(3) is a gap-filler that presupposes “termination of a contract,” the panel held that UNI cannot use it to obtain damages when the underlying agreement is unenforceable under § 42a-2-201(1).

3) Denial of “rollovers” was not a breach; prior practice did not create a duty to approve or negotiate

UNI reframed its breach theory as one of course of dealing and good faith: even if rollovers were not unilateral, UNI argued Leprino had to consider rollover requests in good faith based on prior conduct.

The court analyzed this through the UCC interpretive hierarchy in Conn. Gen. Stat. § 42a-1-303:

• Course of dealing can supplement/qualify terms (§ 42a-1-303(d)), but
• Express terms prevail if inconsistency cannot reasonably be reconciled (§ 42a-1-303(e)).

On the record, the “course of dealing” showed only a permission structure: UNI could ask; Leprino could decide case-by-case. The panel then provided the doctrinal “fit” for rollovers: they were best viewed as proposed modifications of quarterly contracts under Conn. Gen. Stat. § 42a-2-209(1). Under modification doctrine, parties may modify, but modification requires agreement—prior accommodations do not create an obligation to continue accommodating, nor a freestanding duty to negotiate toward modification absent contractual language or authority imposing such a duty.

4) Without impaired contract rights, the implied covenant and CUTPA claims fail

The implied covenant claim failed because, under M&T Bank v. Lewis and Capstone Bldg. Corp. v. Am. Motorists Ins. Co., the covenant protects the right to receive the benefits of the agreement; it is not triggered by conduct that does not impair contractual rights. With no enforceable implied supply agreement and no breach of the express quarterly contracts, UNI had no impaired contractual right to vindicate.

The CUTPA claim failed under Boulevard Assocs. v. Sovereign Hotels, Inc. because it largely reasserted the contract theories and did not add evidence of independently unfair or unethical conduct. When the contract predicates fell away, CUTPA did as well.

C. Impact

Although nonprecedential, the order signals several practical and doctrinal consequences for Connecticut-governed goods supply relationships:

• Oral or implied “supply commitments” remain fragile under § 42a-2-201(1): Parties who rely on a long-term “understanding” without a statute-of-frauds-compliant writing face a steep barrier to judicial enforcement, especially for forward-looking supply obligations.
• Limited utility of estoppel theories in Article 2 contexts: The panel’s reasoning (UCC displacement plus strict part-performance requirements) indicates that equitable doctrines will not easily expand the narrow statutory enforcement window in § 42a-2-201(3)(c).
• Termination notice cannot be used to resurrect an unenforceable deal: The decision rejects an attempted workaround that would convert § 42a-2-309(3) into an independent damages engine even where the underlying “contract” cannot be enforced.
• Course of dealing does not automatically harden into a rollover right: Repeated accommodations may show flexibility in performance expectations, but without clearer proof of a “common basis of understanding” that approval is obligatory, a supplier retains discretion—particularly when the request is properly characterized as a contract modification under § 42a-2-209(1).
• Good faith and CUTPA claims remain tethered to concrete rights or independent misconduct: Where contract rights are absent (unenforceable) or unbreached, add-on claims are vulnerable at summary judgment.

4. Complex Concepts Simplified

• UCC statute of frauds (Conn. Gen. Stat. § 42a-2-201(1)): A rule requiring certain goods contracts (typically above a dollar threshold) to be evidenced by a signed writing to be enforceable. Without it, courts generally will not award contract damages for the alleged bargain.
• Implied-in-fact contract: A contract inferred from the parties’ conduct rather than an explicit written document; it can be real, but still may be unenforceable if the statute of frauds requires a writing.
• Equitable estoppel vs. promissory estoppel: Equitable estoppel prevents a party from asserting a position inconsistent with prior conduct when the other side reasonably relied; promissory estoppel focuses on enforcing a promise to avoid injustice even without consideration. The court treated them as distinct and declined to let equitable estoppel bypass the UCC’s scheme here.
• Part performance (§ 42a-2-201(3)(c)): A narrow exception: an unwritten goods contract may be enforced only “with respect to” goods that have actually been paid for and accepted or received and accepted—i.e., performance that evidences the deal as to specific goods.
• § 42a-2-309(3) reasonable notification: A gap-filler requiring reasonable notice when one party terminates a contract of indefinite duration (unless termination occurs on an agreed event). The court held it cannot create liability when the underlying contract is unenforceable.
• Course of dealing (§ 42a-1-303): Patterns from prior transactions that help interpret an agreement. It can supplement terms, but cannot override clear express terms when reconciliation is unreasonable.
• Modification (§ 42a-2-209(1)): Changing a contract’s terms requires agreement. A history of granted changes does not, by itself, create a duty to keep granting them.
• Implied covenant of good faith and fair dealing: A doctrine requiring parties not to sabotage the other’s ability to receive the contract’s benefits; it does not create new substantive duties beyond the contract.
• CUTPA: Connecticut’s unfair trade practices statute; a mere breach of contract is usually not enough without additional unfair or unethical conduct.

5. Conclusion

The Second Circuit’s order affirms a disciplined UCC framework: (1) an unwritten implied-in-fact supply commitment is not judicially enforceable when it fails § 42a-2-201(1), and estoppel cannot readily expand the UCC’s narrow part-performance pathway; (2) § 42a-2-309(3) does not supply an independent damages claim in the absence of an enforceable underlying contract; (3) a cooperative history of delivery “rollovers” is best treated as episodic modification under § 42a-2-209(1), not as a binding obligation to approve or negotiate modifications; and (4) without impaired contractual rights or independent unfair conduct, implied-covenant and CUTPA claims fail at summary judgment.