The Law

A handshake may be enforceable, depending on events that follow. In a significant decision, the Mississippi Supreme Court has reversed and remanded a lower court’s dismissal of claims brought by Palmer’s Grocery Inc. and its owners, Damon and Jason Palmer, against Chandler’s JKE Inc. and its owners, Robert and Josey Chandler. The case centers on a failed $175,000 oral agreement for the sale of a grocery store in Tupelo, Mississippi, and raises critical questions about the application of the Statute of Frauds and its exceptions.

Palmer’s Grocery, a family‑owned business operating since 1957, was rebranded as Shoppers Value Foods in 2016. In early 2023, the Chandlers, who own multiple Shoppers Value Foods locations, expressed interest in purchasing the grocery’s inventory, stock, and equipment. On March 10, 2023, the parties reached an oral agreement, sealed with a handshake, for the sale. The Chandlers took control of the store, closed it for remodeling, and met with employees. However, no written contract was signed, and the Chandlers ultimately backed out of the deal two weeks later, citing issues with their wholesaler, SuperValu.

The Palmers filed a lawsuit in May 2023, asserting ten claims: (1) breach of contract, (2) breach of implied contract, (3) breach of the duty of good faith and fair dealing, (4) tortious breach of contract, (5) promissory estoppel, (6) equitable estoppel, (7) negligent misrepresentation, (8) negligent infliction of emotional distress, (9) joint and several liability, and (10) attorneys’ fees. The Chandlers moved to dismiss the claims under Mississippi Rule of Civil Procedure 12(b)(6), arguing that the Statute of Frauds barred enforcement of the oral agreement. The Lee County Circuit Court agreed, dismissing the first seven of the ten claims.

The Palmers appealed the decision.

The Mississippi Supreme Court reviewed the case de novo, focusing on whether the Palmers’ claims could survive a motion to dismiss. The court examined two key exceptions to the Statute of Frauds under Mississippi law: the “merchant’s exception” and the “part‑performance exception.”

Merchant’s Exception: Under Mississippi Code Section 75‑2‑201(2), a contract between merchants can be enforceable without a signed writing if a written confirmation of the agreement is sent and the recipient does not object within ten days. The Palmers argued that an email from attorney Michael Gratz, who represented both parties, satisfied this requirement. The email outlined the terms of the agreement and expressed an intent to finalize the deal.

The court found that the email could potentially qualify as a “writing in confirmation of the contract.” While Gratz represented both parties, the court noted that whether he acted as an agent for the Palmers was a factual question that could not be resolved at the motion‑to‑dismiss stage. The court concluded that the Palmers’ claim under the merchant’s exception was sufficient to proceed.

Part‑Performance Exception: The part‑performance exception, outlined in Mississippi Code Section 75‑2‑201(3)(c), allows enforcement of an oral contract if the goods in question have been “received and accepted.” The Palmers alleged that the Chandlers took control of the grocery, directed the disposal of perishable items, and met with employees, actions that could indicate acceptance of the goods.