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IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT

No. 94-41228

CREST RIDGE CONSTRUCTION GROUP, INC.,
Plaintiff-Appellee,
versus
NEWCOURT INC.,
Defendant-Appellant.

Appeal from the United States District Court
for the Eastern District of Texas

February 26, 1996
Before HIGGINBOTHAM, EMILIO M. GARZA, and BENAVIDES, Circuit
Judges.
HIGGINBOTHAM, Circuit Judge:
This diversity case concerns a dispute between a subcontractor
and a supplier. The supplier appeals, on the grounds of
sufficiency of the evidence, a jury verdict awarding the
subcontractor damages for breach of contract. We have jurisdiction
under 28 U.S.C. § 1291, and we affirm.
I
In 1989, two brothers, John and Joseph Brower, formed a
company called Crest Ridge Construction Group, Inc. and sought to
enter the construction business. Previously, the Browers had

brokered construction deals through a company called J.B. &
Associates.
In early 1990, Taylor Woodrow Construction Co., a general
contractor, awarded a subcontract to Crest Ridge for certain
portions of the construction of the Liberty Science Center in
Jersey City, New Jersey. One portion of the subcontract required
Crest Ridge to supply architectural wall paneling for the Center.
The Browers began discussions with Newcourt, Inc., a former client
of J.B & Associates that supplied relatively low-cost foam
paneling. The Browers succeeded in gaining Taylor Woodrow's
approval for the use of Newcourt's foam paneling in the
construction of the Center, and the parties began to exchange
information detailing the requirements for the paneling job.
In late October, 1990, Newcourt issued a price quotation to
J.B. & Associates of $758,000 to supply the necessary paneling.
The price quotation was made "subject to credit department
approval." Four days later, John Brower wrote to Newcourt
requesting that Newcourt issue a quotation to the name of Crest
Ridge and that Newcourt make further clarifications regarding the
details of the job. The record contains no subsequent price
quotation in the name of Crest Ridge. It does, however, contain
two "add-ons," modifications to the price quotation reflecting
changes in Newcourt's understanding of the job specifications,
issued from Newcourt to Crest Ridge. These add-ons increased
Newcourt's price quote to $760,000.
2

On November 7, 1990, Crest Ridge sent Newcourt a completed
credit application form reciting that Crest Ridge had been
established in 1985 and listing one banking and four trade
references. That same day, Newcourt contacted Crest Ridge's
banking reference and discovered that Crest Ridge had opened an
account early in 1990 bearing an average balance of $5000.
Newcourt also contacted Crest Ridge's trade references. One wrote
back on November 20, stating, "No knowledge of this account-perhaps
we dealt with them under a different name." On December 3, a
second responded, "No a/c. Please supply a/c #." Newcourt did not
hear from the other references.
Newcourt began investigating other methods of guaranteeing
payment. The record includes contradictory information regarding
the results of this investigation. In January, 1991, Newcourt
contacted an attorney in New Jersey about the possibility of
placing a lien on the Liberty Science Center property. Calvin
Court, president of Newcourt, testified that in January or
February, 1991, he knew that Newcourt could place a lien on the
property. In contrast, a letter from Newcourt to Crest Ridge dated
February 8, 1991 stated that the property search "raised
questions." This letter reiterated a request made on January 25
for either a copy of a payment bond protecting Newcourt or
sufficient information allowing Newcourt to secure a copy of such
a bond on its own. One month later, Crest Ridge faxed Newcourt the
name and address of Crest Ridge's bonding company. Newcourt did
not contact the bonding company. John Brower testified that Crest
3

Ridge sent Newcourt a copy of a bond guaranteeing Taylor Woodrow's
payment to Crest Ridge late in 1990, but Crest Ridge did not
introduce a copy of this correspondence or the bond into evidence.
In early March, Newcourt contacted American Credit Indemnity
Company and was unable to purchase accounts receivable insurance
from that company. The record includes no information about the
specifics of this communication between American and Newcourt.
Meanwhile, the parties continued to exchange information. On
January 4, 1991, Crest Ridge issued a purchase order to Newcourt
quoting a price of $760,000 and referencing Newcourt's original
price quotation and its two add-ons. The record includes a flurry
of letters from October, 1990 to March, 1991 between Crest Ridge
and Newcourt concerning the details of the project. Newcourt
supplied samples of its wall paneling material, job specifications
and calculations, three revisions of shop drawings, and final
drawings showing where each panel would be placed at the Center.
Crest Ridge and Newcourt had extended discussions over coils and
over the strength of wall paneling fasteners. Newcourt was to
make the first shipment of wall paneling later in 1991.
Testimony at the trial established certain customs and
practices in the construction industry. First, the industry
considered a purchase order issued in response to a price quotation
as a binding event. Second, construction companies presumed that
a supply contract without payment terms would proceed according to
a standard schedule. According to this schedule, the supplier
billed the subcontractor by the 25th of the month and could expect
4

payment by the tenth of the second month thereafter. This 45-day
interval allowed a bill to travel from the subcontractor to the
general contractor to the owner, and for payment to return from the
owner to the general contractor to the subcontractor to the
supplier.
On March 25, 1991, Newcourt wrote to Crest Ridge suspending
all further work on the wall paneling project and demanding payment
in full by April 5. The letter did not mention credit problems; it
gave as Newcourt's reasons for demanding full payment "the
encumbering and confusing progress and lack of receiving pertinent
data necessary to satisfy the requirements on the above-referenced
project."1 In response to the March 25 demand letter, Crest Ridge
attempted several times to contact Newcourt, but Newcourt did not
respond. Crest Ridge then cancelled its order with Newcourt and
covered by obtaining paneling from Alply, Inc. at a higher price.
Newcourt never shipped any paneling to Crest Ridge.
Crest Ridge sued Newcourt for breach of contract in New Jersey
state court. Newcourt removed the action to federal court,
alleging diversity of citizenship. The New Jersey federal court
transferred the case to the Eastern District of Texas, where it was
tried to a jury. At the close of the plaintiff's case, Newcourt
moved for judgment as a matter of law, citing the "subject to
credit department approval" phrase in its price quotation and
1 The parties dispute Newcourt's motivation for taking this
action. Crest Ridge elicited testimony from Newcourt's management
that Newcourt had fallen on hard financial times and had fired much
of its architectural paneling staff. Newcourt argued that it was
unable to verify Crest Ridge's credit-worthiness.
5

arguing that no contract could have existed because Crest Ridge
never obtained the approval of Newcourt's credit department. The
district court denied the motion, which Newcourt did not renew
either at the close of all the evidence or after the jury's
verdict.
The district court instructed the jury regarding the
definition of a contract and the nature of contract formation.
Neither party objected to the charge. In response to the three
interrogatories put to it, the jury found that a contract existed
between Crest Ridge and Newcourt, that Newcourt breached the
contract, and that Crest Ridge's damages totaled $70,214.28.
II
The sole issue on this appeal is whether the evidence was
sufficient to support the jury's verdict that a contract existed
between Newcourt and Crest Ridge and that Newcourt breached the
contract. Newcourt argues that its price quotation was issued
subject to credit department approval. It argues that no contract
existed because Crest Ridge's uncertain financial status prevented
Newcourt's
credit
department
from
approving
the
deal.
Alternatively, Newcourt argues that the phrase "subject to credit
department approval" illustrated that it never agreed to extend
credit to Crest Ridge and thus that its demand of payment up front
constituted no breach of contract.
Under Boeing Co. v. Shipman, 411 F.2d 365, 368-70 (5th Cir.
1969) (en banc), we must uphold the jury's verdict against Newcourt
unless the evidence, viewed in the light most favorable to Crest
6

Ridge, required a reasonable jury to find either that no contract
existed or that Newcourt committed no breach of contract. See
Brock v. Merrell Dow Pharmaceuticals, Inc., 874 F.2d 307, 308-09
(5th Cir.), modified by 884 F.2d 166 (5th Cir. 1989), cert. denied,
494 U.S. 1046 (1990).2
The Uniform Commercial Code governs the substantive legal
issues in this case. Wall panels are "things . . . which are
movable at the time of identification to the contract for sale" and
are thus considered "goods." Tex. Bus. & Com. Code Ann. § 2.105(a)
(Tex. UCC) (Vernon 1994).3 Both Crest Ridge and Newcourt are
entities deal in wall paneling or employ agents having specialized
knowledge of wall paneling and are thus "merchants." Tex. Bus. &
Com. Code Ann. § 2.104(a) (Tex. UCC) (Vernon 1994).
The jury heard evidence sufficient to allow it to conclude
that Newcourt and Crest Ridge formed a contract. The UCC provides
that "[a] contract for the sale of goods may be made in any manner
sufficient to show agreement, including conduct by both parties
which recognizes the existence of such a contract." Tex. Bus. &
Com. Code Ann. § 2.204(a) (Tex. UCC) (Vernon 1994). Newcourt and
Crest Ridge exchanged a price quotation and a purchase order,
documents the construction industry considered to have binding
2 The parties have not briefed the question of whether
Newcourt's failure to renew its motion for a judgment as a matter
of law after either the close of all the evidence or the jury's
verdict should make our standard of review more deferential.
Because the use of a more deferential standard would not affect our
decision in this case, we do not address this issue.
3 The parties agree that Texas substantive law governs this
dispute.
7

effect. Moreover, the parties' conduct illustrated that they
thought they had a deal. The evidence showed that from October,
1990 to March, 1991, the parties engaged in an extended exchange
designed to clarify the details of the project. Newcourt itself
provided material samples, three revisions of shop drawings,
fastening details, stipulations as to the color of each panel, and
final drawings showing where each panel would go.
Newcourt did state that its price quotation was subject to
credit department approval, but in light of the extensive dealings
and preparations between these two parties, the jury could conclude
this clause at most created a condition precedent on Newcourt's
obligation to perform and did not prevent the formation of a
contract. Similarly, the fact that the parties specified no
payment terms does not require us to reverse the jury's verdict.
See Tex. Bus. & Com. Code Ann. § 2.204© (Tex. UCC) (Vernon 1994)
("Even though one or more terms are left open a contract for sale
does not fail for indefiniteness if the parties have intended to
make a contract and there is a reasonable certain basis for giving
an appropriate remedy."). The jury could find that Crest Ridge and
Newcourt intended to make a deal, and that Crest Ridge's cover with
Alply, Inc. provided a reasonably certain basis for the calculation
of damages.
For two reasons, we find unpersuasive Newcourt's alternative
argument that insufficient evidence supported the jury's finding
that Newcourt breached its contract with Crest Ridge. First, the
phrase "subject to credit department approval" does not constitute
8

a refusal to grant credit. Indeed, the requirement of credit
department approval would be unnecessary unless the parties
contemplated some form of credit. Second, because Newcourt and
Crest Ridge left the terms of payment blank in their exchange of
price quotation and purchase order, payment was due either upon
delivery, see Tex. Bus. & Com. Code Ann. § 2.310(1) (Tex. UCC)
(Vernon 1994), or perhaps according to "general usage," see Rusk
County Electric Cooperative, Inc. v. Flanagan, 538 S.W.2d 498, 499-
500 (Tex. Civ. App. - Tyler 1976, writ ref'd n.r.e.). In either
case, Newcourt breached the agreement by demanding full payment in
advance.
We find the evidence sufficient to support the jury's verdict
that a contract existed and that Newcourt breached it. Newcourt
has appealed no other issues, and therefore we affirm the judgment
of the district court.
AFFIRMED.
9

BENAVIDES, Circuit Judge, specially concurring:
Because I agree that the evidence is sufficient to support the
jury's verdict that a contract existed and that Newcourt breached
it, I concur in the judgment. I write separately because I reach
the same conclusion as the majority, but by a different path--one I
believe is consistent with the general principles of contract law
and the Uniform Commercial Code.
The majority accurately recaps the factual background of this
dispute. Newcourt initially issued a price quote to J.B. &
Associates. This was followed by an "add-on" price quote to Crest
Ridge. Both of these price quotes explicitly stated the terms were
"subject to credit department approval." On January 4, 1991, Crest
Ridge issued a purchase order for the wall paneling; this purchase
order left the terms of payment blank. A flurry of correspondence
ensued concerning the details of the project including job
specifications, revisions of shop drawings, final drawings,
samples, and strength of coils and fasteners. On March 25, 1991,
Newcourt issued a demand letter suspending all work on the project
unless there was payment in full by April 5. The subcontractor
Crest Ridge, unable to make full advance payment, was forced to
cover with more expensive paneling purchased under the conventional
industry terms of a 45-day billing cycle. Viewing Newcourt's
payment-in-full demand as a breach of contract, Crest Ridge sued.
10

Following trial, the jury returned a verdict that both a contract
existed between the parties and that Newcourt breached it.
Newcourt appeals arguing that a price quote issued "subject to
credit department approval" that is accepted by a purchase order
silent as to credit terms cannot create an enforceable contract
because there was no agreement as to essential terms.
As the majority correctly notes, this transaction for the sale
of paneling between merchants is governed by the Uniform Commercial
Code. See Tex. Bus. & Com. Code Ann. §§ 2.104(a), .105(a) (Tex.
UCC) (West 1994). Unfortunately, the UCC does not answer every
question about business transactions gone awry. As the Code itself
notes, common law principles of law and equity continue to
supplement its provisions. See id. § 1.103. One such question
concerning contract formation is presented in this case.
The majority intimates that because "Newcourt and Crest Ridge
exchanged a price quotation and a purchase order, documents the
construction industry considered to have binding effect" a contract
was formed. Maj. op. at 7-8. I believe the issue is more complex.
It is hornbook law that contract formation requires offer and
acceptance. Industry custom can fill in missing terms of a
contract or determine the meaning of an agreement. See Tex. Bus.
& Com. Code Ann. § 2.208 (Tex. UCC) (West 1994). Likewise, the UCC
allows agreement to be expressed by conduct. See id. § 2.204(a).
However, contract formation continues to hinge on the existence of
an acceptable offer. The UCC, however, provides no guidance as to
what an "offer" is.

Newcourt premises its argument on the belief that its price
quote was the offer subsequently accepted by Crest Ridge's purchase
order. However, in this case, there are two documents that could
operate as an offer: Newcourt's initial price quote (subject to
credit department approval) or Crest Ridge's purchase order (silent
as to terms). In deciding whether a contract was formed and its
subsequent terms, it is critical to determine which is the "offer"
capable of being accepted.
In general, whoever sends the first form is usually considered
the offeror. 1 James J. White & Robert S. Summers, Uniform
Commercial Code § 1-3, at 10 n.8 (4th ed. 1995). A price
quotation, if detailed enough, can constitute an offer capable of
acceptance. See Axelson, Inc. v. McEvoy-Willis, 7 F.3d 1230, 1232-
33 (5th Cir. 1993); Gulf States Utils. Co. v. NEI Peebles Elec.
Prods., Inc., 819 F. Supp. 538, 549 (M.D. La. 1993); Quaker State
Mushroom v. Dominick's Finer Foods, 635 F. Supp. 1281, 1284 (N.D.
Ill. 1986). However, to do so, it must reasonably appear from the
price quote that assent to the quote is all that is needed to ripen
the offer into a contract. Gulf States, 819 F. Supp. at 549;
Quaker State, 635 F. Supp. at 1281. A price quote that is subject
to the seller's confirmation is not an offer because the buyer's
assent will not consummate the contract. See Axelson, 7 F.3d at
1233 (under Texas law, price quotation requiring seller to accept
order could not be an offer, but only invitation for an offer); see
also Gulf States, 819 F. Supp. at 549; Quaker State, 635 F. Supp.
at 1284. In essence, such qualifying language converts what could
12

have been an offer into a proposal or preliminary negotiation.
Technographics, Inc. v. Mercer Corp., 777 F. Supp. 1214, 1216 (M.D.
Pa. 1991), aff'd, 26 F.3d 123 (3d Cir. 1994).
Newcourt's price quote4 was made "subject to credit department
approval." The inclusion of this condition precludes the price
quote from operating as an offer because Crest Ridge's assent could
not consummate the deal.5 See Gulf States, 819 F. Supp. at 549-50
(price quote reserving seller's right to back away from deal not an
offer); Technographics, 777 F. Supp. at 1216 (inclusion of home
office acceptance clause invalidates price quote as offer); Quaker
State, 635 F. Supp. at 1284-85 (price quotation subject to company
confirmation not an offer).
The fact that Newcourt's price quote could not operate as an
offer does not, however, preclude contract formation. Since the
Newcourt price quotation was not an offer, Crest Ridge's subsequent
purchase order constituted the first offer, acceptance of which
constitutes a valid contract. Axelson is instructive. In Axelson,
4
It is undisputed that Newcourt never supplied a specific price
quote with all material terms to Crest Ridge. However, I assume
for purposes of this discussion that Newcourt's price quote made to
J.B. & Associates plus the add-ons to Crest Ridge constitute a
"price quote" to Crest Ridge.
5
I do not contend that all "subject to" conditions prevent
contract formation. However, Newcourt's offer made "subject to
credit department approval" is essentially the same as one made
"subject to Newcourt's approval." Such an offer is insufficiently
firm to support a contract in the context presented herein. This
is especially true where the testimony at trial indicated that the
credit decision was to be made by a triumvirate composed of
Newcourt's president, vice-president, and chief financial
officer--the same people who were involved in the negotiations of
the deal.
13

we noted that a price quote containing all material terms could be
construed as an offer capable of acceptance by the buyer. 7 F.3d
at 1233. However, we immediately stated that "[t]here is one
problem with this analysis." Id. That problem was language in the
Axelson price quote implying that the supplier had to accept orders
before a contract was concluded. If this type of provision was
present, "the quotation could not be an offer; it would only be an
invitation for an offer." Id. This is precisely what we have
present in this case. Consequently, Crest Ridge's purchase order
becomes the first offer capable of acceptance by Newcourt. See
Technographics, 777 F. Supp. at 1216; Master Palletizer Sys., Inc.
v. T.S. Ragsdale Co., 725 F. Supp. 1525, 1531 (D. Colo. 1989),
aff'd, 937 F.2d 616 (10th Cir. 1991). Newcourt did not send an
explicit confirming memorandum accepting this purchase order offer.
However, the UCC makes clear that a contract for sale of goods may
be made in any manner sufficient to show agreement, including
conduct by the parties. See Tex. Bus. & Com. Code Ann. § 2.204(a)
(Tex. UCC) (West 1994); see also Axelson, 7 F.3d at 1233 (conduct
by parties recognize existence of contract).
The question of whether an agreement was reached is generally
a fact question where, as here, the existence of the agreement is
disputed. Preston Farm & Ranch Supply, Inc. v. Bio-Zyme Enters.,
625 S.W.2d 295, 298 (Tex. 1981). In this case, the jury was
instructed that agreement could be manifested by conduct. As the
majority recounts, there is evidence from which a jury could
14

conclude that Newcourt's conduct reflected an assent to the
purchase order offer.6 The extended exchange between the parties
following the receipt of the purchase order documents Newcourt's
acceptance. Newcourt was intricately involved in the details of
the project providing samples, revisions of shop drawings,
fastening details, color stipulations, and final drawing showing
where each panel will go. In short, I agree with the majority that
a jury could find that Newcourt's conduct illustrated that it
thought they had a deal.
Furthermore, the open payment term of Crest Ridge's purchase
order offer does not prevent contract formation as a matter of law.
The open term would simply be filled in according to UCC
provisions. See Tex. Bus. & Com. Code Ann. §§ 2.204(c), .310(1)
(Tex. UCC) (West 1994). Following a finding of contract formation,
a reasonable jury could also conclude that Newcourt's demand for
6
The evidence does not support a finding of credit department
approval, nor could industry practice with respect to the unstated
payment terms negate this specific condition contained in
Newcourt's purported offer. However, such approval is irrelevant
to the case at bar. The credit approval condition was part of
Newcourt's preliminary invitation to an offer. As previously
discussed, the offer capable of acceptance was Crest Ridge's
purchase order which left the payment term blank. Thus, I would
reject Newcourt's argument that its price quote was either an offer
or that its "subject to credit department approval" language was
somehow subsumed into the subsequent contract with Crest Ridge.
Had Newcourt's initial price quote not suffered from the
infirmity previously discussed, in my view a different result would
indeed be required. This is because the "subject to credit
approval" language, if treated as a condition precedent to contract
formation, precludes the formation of a contract except upon
realization of that condition, which indisputably never occurred.
On the other hand, if the "subject to" language is treated as a
condition precedent to an obligation to perform, a contract could
be formed, but there could be no finding of breach because the
condition to performance was never met.
15

payment in advance constituted a breach of contract. Likewise,
Crest Ridge's cover with an alternate supplier provided a
reasonably certain basis for the calculation of damages.
In this proceeding involving the sale of goods between
merchants, the UCC, complemented by common law contract principles,
dictates the result reached today. Newcourt was indeed the master
of its own offer. However, in choosing to include a requirement of
credit department approval, Newcourt crafted a putative offer that
was insufficiently firm. This transformed Newcourt's price quote
into an invitation to Crest Ridge to make an offer. Because
Newcourt's price quote was not an offer capable of acceptance, I
disavow any language to that effect. However, Crest Ridge's
subsequent purchase order was a valid offer to buy goods which a
reasonable jury could conclude was accepted by Newcourt's conduct
and later breached by Newcourt's demand letter. I therefore concur
in the judgment.
16