Contracts and Statute of Frauds
Facts:035578
Wally owns Windy City Watches in Chicago, Illinois. He needs to buy knockoff Rolexes from a wholesaler, Randy, in Milwaukee, Wisconsin. Wally and Randy discuss terms via telephone and agree Wally will purchase 100 watches for $25.00 a piece for a total of $2,500. Randy agrees to send an order form for the purchase and ship when the signed form is returned from Wally. Wally signed and returned the order form agreeing to purchase the goods. A week later Wally receives 50 watches accompanied by a note explain the remaining 50 watches will arrive in a few days. Also enclosed was the bill for entire order totaling $2,500. By this time, Wally has decided he does not want to purchase the fake Rolexes. He contacts Randy explain the situation wanting to return the watches and reimburse Randy for shipping costs. Randy in turn sues to enforce the original contract.
Issue:
The issue is whether the Illinois UCC Statute of Frauds deems contract unenforceable because it was never reduced to writing.
Law:
Under UCC §2-201 (3a), “A contract that does not satisfy the requirements of subsection 1, but which is valid in other respects is enforceable: if the goods are to be specially manufactured for the buyer and are not suitable for sale to others in the ordinary course of the sellers business and the seller, before notice of repudiation is received and under circumstances that reasonably indicate that the goods are for the buyer, has made either a substantial beginning of their manufacture or commitments for their procurement.” In R.M. Schultz & Assocs. v. Nynex Computer Servs. Co., 1994 U.S. Dist. LEXIS 4509 (N.D. Ill. Apr. 8, 1994) the courts say, “The specially manufactured goods exception exempts a contract from the requirements of the statute of frauds is the goods are to be specially manufactured for the buyer and are not suitable for sale to others in the ordinary course of the seller’s business and the seller, before notice of repudiation is
Wally owns Windy City Watches in Chicago, Illinois. He needs to buy knockoff Rolexes from a wholesaler, Randy, in Milwaukee, Wisconsin. Wally and Randy discuss terms via telephone and agree Wally will purchase 100 watches for $25.00 a piece for a total of $2,500. Randy agrees to send an order form for the purchase and ship when the signed form is returned from Wally. Wally signed and returned the order form agreeing to purchase the goods. A week later Wally receives 50 watches accompanied by a note explain the remaining 50 watches will arrive in a few days. Also enclosed was the bill for entire order totaling $2,500. By this time, Wally has decided he does not want to purchase the fake Rolexes. He contacts Randy explain the situation wanting to return the watches and reimburse Randy for shipping costs. Randy in turn sues to enforce the original contract.
Issue:
The issue is whether the Illinois UCC Statute of Frauds deems contract unenforceable because it was never reduced to writing.
Law:
Under UCC §2-201 (3a), “A contract that does not satisfy the requirements of subsection 1, but which is valid in other respects is enforceable: if the goods are to be specially manufactured for the buyer and are not suitable for sale to others in the ordinary course of the sellers business and the seller, before notice of repudiation is received and under circumstances that reasonably indicate that the goods are for the buyer, has made either a substantial beginning of their manufacture or commitments for their procurement.” In R.M. Schultz & Assocs. v. Nynex Computer Servs. Co., 1994 U.S. Dist. LEXIS 4509 (N.D. Ill. Apr. 8, 1994) the courts say, “The specially manufactured goods exception exempts a contract from the requirements of the statute of frauds is the goods are to be specially manufactured for the buyer and are not suitable for sale to others in the ordinary course of the seller’s business and the seller, before notice of repudiation is