Woodcrest Fabrics v. B & R Textile Corp.

Woodcrest Fabrics, Inc. (Woodcrest) (plaintiff) was a New York corporation that regularly bought textile fabrics using B. J. Stein, Ltd (Stein), a textile broker. B & R Textile Corporation (B & R) (defendant) was a New York corporation that sold textile fabrics through Stein. Stein brokered several deals between B & R and Woodcrest. For each transaction, Stein sent sales notes to B & R and Woodcrest. Each note listed the transaction terms, including an arbitration provision covering all controversies arising under the contract. Each note also included the statement that both parties received the same notes and that both parties would be bound by the terms unless objection was made within 10 days of receipt of the note. The sending of sales notes with arbitration provisions to confirm transactions was standard practice for the New York textile industry. Woodcrest refused to pay for allegedly substandard and defective goods it received from two orders. B & R demanded that the dispute be settled through arbitration under the terms of the sales notes. Woodcrest moved for a show-cause order in New York state court, claiming that Woodcrest never agreed to arbitration and that the provisions on the sales notes were not binding. The trial court stayed arbitration, finding that B & R failed to show that Woodcrest agreed to arbitrate. B & R appealed to the New York Supreme Court, Appellate Division.