Just Funky, LLC v. Think 3 Fold, LLC

United States Court of Appeals
For the Eighth Circuit
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No. 24-2450
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Just Funky, LLC
Plaintiff - Appellant
v.
Think 3 Fold, LLC
Defendant - Appellee
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Appeal from United States District Court
for the Western District of Arkansas - Fayetteville
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Submitted: April 15, 2025
Filed: July 1, 2025
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Before LOKEN, GRUENDER, and GRASZ, Circuit Judges.
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GRUENDER, Circuit Judge.
This appeal encompasses several business disputes between Just Funky, LLC
and Think 3 Fold, LLC. Just Funky contends that Think 3 Fold breached a contract
for the purchase of a large amount of plush toys. Think 3 Fold asserts that no such
contract was formed but that the parties had entered into a separate sales contract for

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a smaller amount of plush toys. The district court1 ruled in favor of Think 3 Fold.
Finding no reversible error, we affirm.
I. Background
Just Funky is an Ohio company that manufactures fandom-type goods. Think
3 Fold is an Arkansas toy company. The parties decided to work together in 2020
when Think 3 Fold won a bid to supply plush toys to Walmart. Just Funky would
manufacture and sell plush toys to Think 3 Fold, and Think 3 Fold would in turn sell
the plush toys to Walmart. The parties’ business relationship—while initially
productive—later turned contentious. We describe here the sequence of events that
spawned multiple lawsuits in several jurisdictions.
A. The 2021 Purchase Orders
In November and December 2021, Think 3 Fold issued four purchase orders
to Just Funky for a total of 256,748 plush toys at $7.00 per unit. Each purchase
order, however, stated that “[p]ricing [was] not finalized.” To negotiate pricing,
Alison Biggers—one of Think 3 Fold’s members—and Raj Arora—one of Just
Funky’s members—began discussions. On February 8, 2022, Biggers emailed
Arora that Think 3 Fold could not exceed $7.50 per unit because the company had
committed to a $15 retail price with Walmart. Arora countered with a price of $9.50
per unit. Biggers told Arora that Think 3 Fold could only agree to a price of $9.50
if Walmart agreed to increase the retail price to $20. On February 15, Biggers
emailed Arora that the parties should place the orders on hold pending confirmation
from Walmart.
The next day, Arora emailed Biggers that Just Funky would consider the
purchase orders to be cancelled unless Biggers responded “differently by 11 AM
1 The Honorable Timothy L. Brooks, United States District Judge for the
Western District of Arkansas.

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EST tomorrow morning.” The following morning, Arora emailed Biggers that Just
Funky would “proceed with other avenues to sell the product.” Biggers responded
that Think 3 Fold’s “intent ha[d] always been to honor [the] existing [purchase
orders]” but that Just Funky’s pricing had changed. Arora reiterated that Just Funky
considered the purchase orders to be cancelled and that, if Think 3 Fold did not wish
for the purchase orders to be cancelled, Think 3 Fold needed to issue revised
purchase orders. On March 7, Biggers emailed Arora that she “had hoped to work
toward a solution but given communications . . . I think we should pause for now.”
Arora responded: “Please clarify so we can resolve any miscommunication. I am
happy to get on a call with you to discuss and resolve the plush order situation.”
However, there is no evidence to indicate that the parties resolved the purchase order
matter at that time.
B. The Loan
Just Funky did not merely serve as a vendor of plush toys to Think 3 Fold.
Just Funky also served as a creditor. In December 2021, while the purchase orders
were being discussed, Think 3 Fold expressed interest in receiving a loan from Just
Funky. Just Funky agreed to provide a loan, and the parties executed a secured
convertible promissory note (“the Note”) with a line of credit up to $3,000,000.
Pursuant to the terms of the Note, Think 3 Fold was required to make weekly
payments on the Note. As security for the loan, Think 3 Fold granted Just Funky a
security interest in its assets. Think 3 Fold’s members also executed a separate
agreement in their personal capacities to guarantee repayment of the loan.
Think 3 Fold accessed $944,347 of the $3,000,000 in December 2021.
However, Think 3 Fold failed to make the required January payments. On February
2, 2022, Just Funky issued a notice of default to Think 3 Fold, demanding full
repayment of the loan and all associated interest within two business days. Think 3
Fold made a one-time payment of $25,000 on February 4 but failed to make further
payments. Several weeks later, Just Funky filed suit against Think 3 Fold’s members
in the United States District Court for the Northern District of Ohio, seeking to

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enforce the members’ personal guaranty of the Note. Just Funky also filed the
present case against Think 3 Fold in the United States District Court for the Western
District of Arkansas, claiming breach of the Note.
The parties began settlement negotiations, and they reached an agreement in
April 2022. Under the terms of the settlement agreement, Think 3 Fold would pay
all outstanding principal and accumulated interest on the Note in the amount of
$1,264,774.84 by April 18, 2022. In exchange, Just Funky would dismiss both of
its pending lawsuits within ten business days of receiving the payment. The
settlement agreement provided that untimely payment would constitute a material
breach.
Instead of resolving the parties’ claims, the settlement agreement complicated
matters further. Think 3 Fold paid the settlement amount late. To account for the
interest that accumulated due to the untimely payment, Think 3 Fold made an
additional payment of $4,578.41. Just Funky accepted Think 3 Fold’s payments but
refused to dismiss the lawsuits, citing Think 3 Fold’s late payment.2
C. Attempts to Modify the Settlement Agreement
In an attempt to resolve all outstanding issues, Think 3 Fold and Just Funky
attempted to modify the terms of the settlement agreement. Arora and Biggers
discussed the terms for Just Funky to dismiss its pending lawsuits. One such term
was for the parties to enter into an agreement for the sale of a large amount of plush
toys (“the larger plush deal”) and, once that amount was fully paid, Just Funky would
dismiss its lawsuits. On April 27, 2022, Arora sent Biggers an email, which provided
Think 3 Fold with several “option[s]” to consider for the larger plush deal. Each
option proposed different unit prices for the plush toys: $7.25, $7.35, $7.50, $7.57,
and $9.50. The following day, Biggers texted Arora: “I have been on with [Think 3
2 Just Funky initiated a third lawsuit against Think 3 Fold in the Circuit Court
of Cook County, Illinois, seeking to obtain a judgment against Think 3 Fold under
the settlement agreement. Just Funky later dismissed that lawsuit.

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Fold’s attorney] since we talked. . . . As I said, this is really different than what we
expected based on our conversations so it is taking longer to review. As you know,
we are working to figure out the plush scenario.” Biggers later texted Arora: “We
have a good plan.” She elaborated: “We will pay the $173k Monday. We will pay
$1,014,788 (50% of the total plush amount) on Tuesday. We will pay the remaining
50% of plush by 5/10. We will use the original settlement and it will be updated
with the new date and amount as discussed.” Arora responded that he had to “thin[k]
about it.”
On April 29—while the parties were still discussing the terms of a modified
settlement agreement—Arora called Biggers in a frantic state. He told Biggers that,
while he knew the “plush [was] still being discussed,” he had learned that some of
Just Funky’s plush toys were sitting at a port in Los Angeles. Arora proposed that
Think 3 Fold immediately pay for 14,856 plush toys, or else the toys would be
subject to high storage costs. Within twenty-four hours, Think 3 Fold wired Just
Funky $111,420 for the 14,856 plush toys (“the smaller plush deal”). Just Funky,
however, failed to deliver the plush toys and kept the $111,420.
Following the smaller plush deal, Arora and Biggers continued negotiating
the terms of a modified settlement agreement. At times, it appeared that Arora and
Biggers were nearing agreement. But subsequent communications made clear that
the parties had misunderstood each other and no agreement was reached. Finally,
on May 2, Arora and Biggers agreed that their attorneys should discuss and finalize
the matter.3 Shortly thereafter, Just Funky filed an amended complaint in the present
case, adding new claims pertaining to the Note4 and further alleging that Think 3
Fold had breached a contract for the larger plush deal. Think 3 Fold filed two
counterclaims, only one of which is relevant here: Think 3 Fold alleged that Just
3 There is nothing to indicate that the attorneys ever reached an agreement.
4 In November 2022, the district court granted Think 3 Fold’s motion to
dismiss Just Funky’s claims pertaining to the fully paid original Note.

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Funky had breached a contract for the smaller plush deal because it had kept both
the $111,420 and the 14,856 plush toys.
Think 3 Fold moved for summary judgment on Just Funky’s breach of
contract claim, asserting that a contract had never been formed on the larger plush
deal. Just Funky argued in response that the 2021 purchase orders and the parties’
communications in April and May 2022 (“the April/May modified settlement
agreement negotiations”) evinced a contract for the larger plush deal. The district
court first determined that the 2021 purchase orders had “no bearing” because the
parties never reached a meeting of the minds on price and negotiations over the
purchase orders broke down in February 2022. That left only the April/May
modified settlement agreement negotiations. The district court found that the
April/May modified settlement agreement negotiations showed that the parties
considered the larger plush deal to be part and parcel of the parties’ attempt to
modify the settlement agreement. Because the parties could not agree on a payment
schedule, price, and other remaining terms for executing a modified settlement
agreement, the district court concluded that a contract also had not been formed for
the larger plush deal. Accordingly, the district court granted summary judgment to
Think 3 Fold on Just Funky’s breach of contract claim.
The case proceeded to trial on Think 3 Fold’s breach of contract counterclaim
pertaining to the smaller plush deal. Just Funky claimed that, even if a contract had
been formed, it was entitled to a setoff of $173,000 that it was purportedly owed by
Think 3 Fold. Despite Just Funky’s vague assertions regarding the basis for this
setoff amount, the district court determined that the alleged setoff amount was a
proposed amount that Think 3 Fold had offered to pay Just Funky as part of their
negotiations for modifying the settlement agreement. Because the setoff amount
was not an admission of debt owed, but rather an amount under discussion for
settlement purposes, the district court rejected Just Funky’s setoff defense. The
district court then found that Just Funky had breached the contract for the smaller
plush deal and entered judgment in favor of Think 3 Fold on its counterclaim.

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II. Discussion
On appeal, Just Funky asserts that the district court erred in granting summary
judgment to Think 3 Fold on its breach of contract claim pertaining to the larger
plush deal. Just Funky also asserts that the district court erred in rejecting its setoff
defense with respect to the smaller plush deal.
We first address whether the district court erred in granting summary
judgment to Think 3 Fold on Just Funky’s breach of contract claim for the larger
plush deal. We review de novo the district court’s grant of summary judgment.
Midwest Oilseeds, Inc. v. Limagrain Genetics Corp., 387 F.3d 705, 710-11 (8th Cir.
2004). Summary judgment is proper if there is no genuine issue of material fact and
the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a).
The parties agree on the applicable law. Under Arkansas law, “the essential
elements of a contract are (1) competent parties, (2) subject matter, (3) legal
consideration, (4) mutual agreement, and (5) mutual obligations.” FutureFuel
Chem. Co. v. Lonza, Inc., 756 F.3d 641, 646 (8th Cir. 2014) (citation modified)
(quoting Arkansas law). Arkansas law requires a “meeting of the minds as to all
terms, using objective indicators.” Id. Provided there was a meeting of the minds,
a court’s role is to “construe and enforce the contract that [the parties] have made.”
Id.
Just Funky asserts that a contract for the larger plush deal was formed based
on the 2021 purchase orders and/or the April/May modified settlement agreement
negotiations. We disagree. With respect to the purchase orders, purchase orders are
generally considered to be offers. Bio-Tech Pharmacal, Inc. v. Int’l Bus.
Connections, LLC, 184 S.W.3d 447, 450 (Ark. Ct. App. 2004). Here, Think 3 Fold’s
purchase orders to Just Funky offered a non-finalized price of $7.00 per unit. In the
ensuing negotiations, Biggers told Arora that Think 3 Fold was willing to pay up to

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$7.50 per unit. However, Just Funky did not accept Think 3 Fold’s offer.5 Instead,
Arora countered with a price of $9.50. See Younts v. City of North Little Rock, 744
S.W.2d 715, 716 (Ark. 1988) (noting that a counteroffer operates as a rejection of
an offer). Biggers did not accept the price of $9.50 but rather told Arora that they
should place the orders on hold pending confirmation from Walmart that a $20 retail
price was acceptable. As a result, Arora told Biggers that, if Think 3 Fold wished to
proceed with the plush toy orders, it needed to issue revised purchase orders—to
which Biggers replied that she believed they had agreed to a price of $7.00 per unit.
Biggers later told Arora that they should pause communications. Thus, the
undisputed evidence shows that no contract was formed based on the purchase orders
because the parties did not reach a “meeting of the minds” on the price term. Lonza,
756 F.3d at 646.
Just Funky contends that a contract was formed despite the disagreement on
price because Arkansas’s Uniform Commercial Code provides that “[e]ven though
one (1) 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
reasonably certain basis for giving an appropriate remedy.” Ark. Code Ann. § 4-2-
204(3). We agree with the district court that “the problem is not that the parties left
terms ‘open,’ but that they explicitly disagreed to certain terms.” Discussions do not
show that the parties agreed to proceed with the purchase orders, with the price term
left open to be resolved at a later date. Rather, they show that price was an essential
term and that, without agreement on that term, the parties would not proceed with
the purchase orders. See Chadick v. Walters, 654 S.W.3d 837, 841-42 (Ark. Ct. App.
2022) (holding that the “circuit court was clearly erroneous in finding an enforceable
contract existed” even though the parties had likely agreed to transfer and price of
the property in question because “there was no meeting of the minds . . . regarding
the specific-performance provision”). Indeed, Arora’s email to Biggers stating that
he considered the purchase orders to be cancelled reflects the parties’ unwillingness
to proceed without an agreement at the outset on the price term. We thus conclude
5 Just Funky never signed the purchase orders.

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that Just Funky never accepted Think 3 Fold’s offer as delineated in the purchase
orders.
Separately, Just Funky points out that a purchase order constitutes an
acceptance rather than an offer when the parties’ course of dealing indicates that the
“purchase order was simply confirmation of a contract that had already been made.”
Bio-Tech Pharmacal, 184 S.W.3d at 451. Just Funky, however, is unable to point
to any text message, email, or other piece of evidence which indicates that the parties
entered into a contract prior to the issuance of the purchase orders and that Just
Funky “was simply awaiting confirmation [of that contract] in the form of [Think 3
Fold’s] purchase order[s].” Id. Instead, Just Funky merely states in its brief that this
is an issue of fact to be decided at trial. By doing so, Just Funky incorrectly attempts
to shift the burden to Think 3 Fold to disprove its claim, even though Just Funky
bears the burden of presenting sufficient evidence to defeat Think 3 Fold’s motion
for summary judgment. See Brunsting v. Lutsen Mountains Corp., 601 F.3d 813,
820 (8th Cir. 2010) (delineating when a district court’s grant of summary judgment
is appropriate). Thus, we reject Just Funky’s assertion that the purchase orders
themselves constituted an acceptance of a contract previously formed between the
parties. Rather, we conclude that the purchase orders have no relevance because
Arora’s express rejection of the purchase orders terminated Think 3 Fold’s offer.
Turning to the April/May modified settlement agreement negotiations, Just
Funky claims that a contract for the larger plush deal was formed during this time
because an April 27 email from Arora to Biggers “confirmed the quantities,
products, and anticipated delivery dates” for the larger plush deal. However, the
district court found—and Just Funky does not dispute—that the discussions for the
larger plush deal were part and parcel of the discussions concerning a modification
to the settlement agreement. The parties never finalized the terms for modifying the
settlement agreement because they could not agree on a payment schedule, price,
and other remaining terms. See Riley v. First State Bank, 686 S.W.3d 44, 51 (Ark.
Ct. App. 2024) (“The emails make clear that no meeting of the minds occurred
because neither party had manifested assent to all the particular terms of the

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release. . . . Simply put, there was still work to be done.”). Because there was not a
“meeting of the minds as to all terms,” we conclude that the district court did not err
in finding that no contract was formed for the larger plush deal. Lonza, 756 F.3d at
646. Accordingly, the district court’s grant of summary judgment to Think 3 Fold
was appropriate.
We next address whether the district court erred in rejecting Just Funky’s
setoff defense with respect to the smaller plush deal. After a bench trial, we review
the district court’s legal conclusions de novo and its factual findings for clear error.
Kaplan v. Mayo Clinic, 847 F.3d 988, 991 (8th Cir. 2017). To establish a setoff
defense, Just Funky must show, inter alia, that it had a right to collect against Think
3 Fold due to a “fully matured” claim.6 Vale v. Buchanan, 135 S.W. 848, 849 (Ark.
1911). Just Funky asserts that it had a right to collect against Think 3 Fold because
Think 3 Fold admitted to owing it $173,000. After reviewing the record, we agree
with the district court that the $173,000 was an amount that Think 3 Fold offered to
pay Just Funky as part of the discussions for a modified settlement agreement. As
the district court found, “[b]ecause the parties never reached an agreement on a
modified settlement, the $173,000 never became due.” Thus, we conclude that the
district court did not err in rejecting Just Funky’s setoff defense.
III. Conclusion
For the foregoing reasons, we affirm the judgment of the district court.
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6 Just Funky cannot claim a right to collect based on the defaulted loan because
that claim was extinguished by the district court when it found that Just Funky’s
payments satisfied the Note.

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