Statute of Frauds question

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BRedd
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Re: Statute of Frauds question

Postby BRedd » Thu Dec 04, 2008 12:03 am

mcat4life87 wrote:Can anyone help me with this hypothetical?

On July 1, ABC, a maker of children's toys, and Bobo orally agreed to a contract under which ABC promised to manufacture and deliver 100 model train sets to Bobo at a unit price of $95 per set. Bobo ordered the trains as part of a long-planned venture into the retail toy trade. On July 14, ABC sent Butler the following note:

"Just a note to confirm that we will provide you with the 50 special train sets for $95 each as we agreed to on July 1. ABC"

On July 18, Bobo discovered that he could purchase a comparable set from XYZ at a cheaper price. So on July 20, Bobo replied to ABC with a note:

"I thought we agreed on 75 trains, but no matter, b/c I've decided that I no longer want them. Hope to do business in the future. Signed, Bobo"

Can Bobo successfully use Statute of Frauds as defense?

End of Hypothetical.


I haven't done an exam question yet, and am curious to see what are the issues I should be spotting in a question like this. Thanks in advance!!



The key here is that ABC promised to MANUFACTURE the train sets. If you go by the facts, they imply that the train sets are not pre-made and thus need to be specially manufactured (specially manufactured goods are an exception to the SOF, so the oral agreement is binding). If the ABC already started building the train sets then all the other conversations are pointless and a contract exists for 100 train sets. If not then the other conversations come into play.
There is another caveat that is not SOF, there seems to be a misunderstanding concerning the quantity of train sets. Both parties are equally responsible for this misunderstanding, and an essential K term (quantity) is involved. It is possible that the contract is void because of this.

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bwv812
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Re: Statute of Frauds question

Postby bwv812 » Thu Dec 04, 2008 12:25 am

BRedd wrote:There is another caveat that is not SOF, there seems to be a misunderstanding concerning the quantity of train sets. Both parties are equally responsible for this misunderstanding, and an essential K term (quantity) is involved. It is possible that the contract is void because of this.


This does seem important, but under the new 2-207, isn't the contract enforceable to the extent that both parties agree on the terms? To the extent that they have agreed on a minimum of 50 sets, shouldn't the k be enforceable on those terms? Of course, under the new UCC that would remove the SoF altogether, as the K would be for less than $5000. Under the old UCC Bobo's ill-advised last shot would probably be binding, and possibly make the K enforceable on that basis.

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underdawg
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Re: Statute of Frauds question

Postby underdawg » Thu Dec 04, 2008 12:39 am

i have in my notes that courts never use gap-filling to set a quantity, but that must mean when there is no indication of quantity at all. since it's 50-75 sets, i don't see how that should be fatal

BRedd
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Re: Statute of Frauds question

Postby BRedd » Thu Dec 04, 2008 1:32 am

bwv812 wrote:
BRedd wrote:There is another caveat that is not SOF, there seems to be a misunderstanding concerning the quantity of train sets. Both parties are equally responsible for this misunderstanding, and an essential K term (quantity) is involved. It is possible that the contract is void because of this.


This does seem important, but under the new 2-207, isn't the contract enforceable to the extent that both parties agree on the terms? To the extent that they have agreed on a minimum of 50 sets, shouldn't the k be enforceable on those terms? Of course, under the new UCC that would remove the SoF altogether, as the K would be for less than $5000. Under the old UCC Bobo's ill-advised last shot would probably be binding, and possibly make the K enforceable on that basis.


The revised UCC is not in effect anywhere, yet.

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bwv812
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Re: Statute of Frauds question

Postby bwv812 » Thu Dec 04, 2008 2:09 am

BRedd wrote:
bwv812 wrote:
BRedd wrote:There is another caveat that is not SOF, there seems to be a misunderstanding concerning the quantity of train sets. Both parties are equally responsible for this misunderstanding, and an essential K term (quantity) is involved. It is possible that the contract is void because of this.


This does seem important, but under the new 2-207, isn't the contract enforceable to the extent that both parties agree on the terms? To the extent that they have agreed on a minimum of 50 sets, shouldn't the k be enforceable on those terms? Of course, under the new UCC that would remove the SoF altogether, as the K would be for less than $5000. Under the old UCC Bobo's ill-advised last shot would probably be binding, and possibly make the K enforceable on that basis.


The revised UCC is not in effect anywhere, yet.

I know, and it seems unlikely to be adopted, but I don't think it's a coincidence that one of the numbers was 50 train sets at $95 each when the new SoF has a $5000 limit.

underdawg wrote:i have in my notes that courts never use gap-filling to set a quantity, but that must mean when there is no indication of quantity at all. since it's 50-75 sets, i don't see how that should be fatal

Yes, but the requirements for an agreement are a little vague under 2-201; it basically says that there must be some written record indicting that an agreement has been made, signed by the person against whom enforcement is sought, and that the contract is not enforceable "beyond the quantity of goods shown in the record." It seems a little ambiguous to me.

snotrocket
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Re: Statute of Frauds question

Postby snotrocket » Thu Dec 04, 2008 9:11 am

i have in my notes that courts never use gap-filling to set a quantity, but that must mean when there is no indication of quantity at all. since it's 50-75 sets, i don't see how that should be fatal

This is correct. The official comments make it clearer than the language of the statute that the writing must state some quantity. Misstating it is not fatal to the function of the writing as evidence of the contract, but the plaintiff relying on it cannot enforce it beyond whatever quantity it states.

"Only three definite and invariable requirements as to the memorandum are made by this subsection. First, it must evidence a contract for the sale of goods; second, it must be "signed", a word which includes any authentication which identifies the party to be charged; and third, it must specify a quantity." UCC 2-201 cmt. 1.

The big picture to keep in mind is that courts (appeals courts, at any rate) do not like the SOF. The UCC version shows this, because it has loads of exceptions. Trial courts love it because it lets them clear their dockets by throwing contract cases out on motions to dismiss or summary judgment. But higher courts hate it because lots of jackasses try to make oral contracts knowing they are within the SOF, with the idea of using it later to get out of them. It seems like a simple defense, but courts will go to some pretty silly lengths to find it satisfied rather than toss out what appear to be otherwise legitimate deals.

snotrocket
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Re: Statute of Frauds question

Postby snotrocket » Thu Dec 04, 2008 9:14 am

I know, and it seems unlikely to be adopted, but I don't think it's a coincidence that one of the numbers was 50 train sets at $95 each when the new SoF has a $5000 limit.

It seems like an easy point or two to mention that under the revised UCC the contract (if and when enacted) the contract would not pose an SOF problem at all. There is no reason not to mention that, and you're right that the way the math is arranged the question pretty much begs you to notice this.




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