Business Law Chapter 15 Homework Outcome Identify And Describe The

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*** Chapter Outcome ***

Identify and describe the other methods of complying with the general contract

and the UCC statute of frauds provisions.

Sales of Goods

The UCC provides that a contract for the sale of goods (movable personal

property) for the price of $500 or more is not enforceable unless there is

some su!cient writing.

Admission — The Code permits an oral contract for the sale of goods to be

enforced against a party who admits in his pleading, testimony, or otherwise

in court that a contract was made.

Specially Manufactured Goods — Where goods are specially

manufactured for a particular buyer and cannot be sold to others in the

CASE 15-3

KALAS v. COOK

Appellate Court of Connecticut, 2002

70 Conn.App. 477, 800 A.2d 553, 47 U.C.C. Rep.Serv.2d 1307

http://scholar.google.com/scholar_case?case=9737435026218396545&q=800+A.2d+553&hl=en&as_sdt=2,34

Peters, J.

Pursuant to a long-standing oral agreement, a print shop manufactured and delivered written

materials designed by the buyer for the buyer’s use and sale. After the buyer’s death, the

executor of her estate refused to pay for the last deliveries of these materials to the buyer.

The principal issue in this appeal is whether the statute of frauds, as codified in the Uniform

Commercial Code, [citation], bars enforcement of the oral agreement. * * * [W]e agree with

The trial court held that the transaction between the plaintiff and the deceased was a sale

of goods as that term is defined in [UCC] §2–105. That determination has not been

challenged on appeal. As a contract for the sale of goods, its enforcement was not precluded

by the statute of frauds provision. * * * Accordingly, the court rendered a judgment in favor

of the plaintiff in the amount of $24,599.38. The defendant has appealed.

The facts found by the trial court, which are currently uncontested, establish the

background for the court’s judgment. The plaintiff, doing business as Clinton Press of

Tolland, operated a printing press and, for several decades, provided written materials,

including books and pamphlets for Simmons. Simmons ordered these materials for use and

sale at her farm, known as Caprilands Herb Farm (Caprilands). The defendant has not

* * *

On appeal, the defendant argues that the oral contract was invalid * * * because a writing

was required by [UCC] §2–201. This argument is unpersuasive. * * *

* * *

* * * Contracts for the sale of goods * * * are governed by §2–201. [Citations.]

Under §2–201, oral agreements for the sale of goods at a price of $500 or more are

presumptively unenforceable. [Citations.] The applicable provisions in this case, however,

are other subsections of §2-201.

manufacture or commitment must have been commenced under circumstances reasonably

indicating that the goods are for the buyer and prior to the seller’s receipt of notification of

contractual repudiation.” [Citation.] In applying this standard, “courts have traditionally

looked to the goods themselves. The term ‘specially manufactured,’ therefore, refers to the

nature of the particular goods in question and not to whether the goods were made in an

unusual, as opposed to the regular, business operation or manufacturing process of the

seller.” [Citations.]

Printed material, particularly that, as in this case, names the buyer, has been deemed by

both state and federal courts to fall within the exception set out for specially manufactured

goods. [Citations.]

Modification or Rescission of Contracts within the Statute of Frauds

Oral contracts modifying previously existing contracts are unenforceable if

the resulting contract is within the statute of frauds. The reverse is also true:

an oral modi(cation of a prior contract is enforceable if the new contract is

not within the statute of frauds.

B. COMPLIANCE WITH THE STATUTE OF FRAUDS

A contract that is within the statute of frauds requires evidence of a

su!cient writing or record, but does not require any speci(c form and does

not have to be complete.

General Contracts Provisions

The note or memorandum, which may be formal or informal, must:

1. specify the parties to the contract;

CASE 15-4

ESTATE OF JACKSON v. DEVENYNS

Supreme Court of Wyoming, 1995

892 P.2d 786

http://scholar.google.com/scholar_case?case=11233159489095516955&q=892+P.2d.786&hl=en&as_sdt=2,34

Golden, J.

Appellants, personal representatives of the estate of George Herbert Jackson, appeal the

probate court’s order of conveyance in favor of appellees. Appellants claim a writing signed

by George Jackson purporting to sell seventy-nine acres, reserve approximately one acre,

and sell machinery is unenforceable because the agreement does not sufficiently describe the

* * *

Facts

On February 9, 1993, George Jackson (Jackson) and his neighbors, Karen and Steve

Devenyns (Devenyns), drafted and signed a document which reads as follows:

George Jackson agrees to sell 79 acres and machinery to Steve and Karen Devenyns for

$120,000.00

* * *

1. George want[s] to keep yard intact which is area 66’ × 114’ as well as area around house

approximately 1.3 acres 168’ × 325’.

Devenyns ha[ve] first option to buy on property George will provide title insurance

and survey house and approximately 1.3 acre from total. This survey can be done within

5 months.

violative of the parol evidence rule, the statute of frauds * * *. However, the probate court

heard testimony from witnesses for the Devenyns and considered parol evidence to

determine whether the document satisfied the statute of frauds.

* * *

From parol evidence, the probate court determined that Jackson had used words of

ownership referring to the eighty acres of real property he owned in Park County, Wyoming,

and that Jackson did not own any other real property in the world. The probate court further

Discussion

Statute of Frauds

* * *

A written memorandum purporting to convey real estate must sufficiently describe the

property so as to comply with the requirements of the statute of frauds and permit specific

performance. [Citation.] * * *

(a) * * *

* * * This Court’s decision in Noland [citation] concluded that a valid contract to convey

land must expressly contain a description of the land, certain in itself or capable of being

rendered certain by reference to an extrinsic source which the writing itself designates.

[Citation.] Noland expressly prohibited supplying the writing’s essential provisions by

inferences or presumptions deduced from oral testimony. [Citation.]

Parol Evidence

The parties both recognize that the central issue is the adequacy of the property description

supplied in the agreement to satisfy the statute of frauds. The estate contends the probate

court improperly relied upon parol evidence in deciding the document had sufficiently

described Jackson’s property in satisfaction of the statute of frauds. The general rule for

Wyoming is that parol evidence is admissible to identify described property, but parol

evidence may not supply a portion of the description. [Citation.]

This writing insufficiently describes the property it purports to convey, to reserve, and

for which it grants an option to purchase. All three of these land transactions fall under the

statute of frauds and each must be sufficiently definite in description to satisfy the statute of

frauds or, as a matter of law, the contract is void because an essential term has been omitted.

[Citation.] We also note that if the description of the property reserved out of the tract to be

conveyed is indefinite and uncertain, then the general description of the land to be conveyed

is indefinite and the entire conveyance must fail. [Citation.]

* * *

Conclusion

The parol evidence received in this case reveals that fraud is not a concern and leaves no

doubt as to the identity of the property involved, but the property was not described in the

agreement and the agreement cannot be enforced. The legislative policy justifying the statute

of frauds requires this Court to test not what the parties to the contract know, but what they

Sale of Goods

There is an even more lenient writing requirement under the UCC in the case

of merchants:

1. Some writing or record su!cient to indicate that a contract has been

made between the parties

C. EFFECT OF NONCOMPLIANCE

If an oral contract that is within the statute does not comply with the

statutory requirements, the contract is unenforceable.

Full Performance

After all the promises of an oral contract have been performed, the statute of

frauds no longer applies.

Restitution

II. PAROL EVIDENCE RULE

While drawing up a written contract, the parties often make offer or

tentative agreements, which may be canceled or withdrawn in the

give-and-take of negotiations. Ultimately, a final draft of the written contract

is prepared and signed, declaring it to be the entire contract. The “parol

evidence” rule prohibits the later introduction of evidence from negotiations

to change the written agreement.

*** Chapter Outcome ***

Explain the parol evidence rule and identify the situations to which the rule does not

apply.

A. THE RULE

When a contract that is intended to be the complete agreement is expressed

in writing, the parol evidence rule excludes prior oral or written negotiations

or agreements that may vary, alter, or change the written contract.

CASE 15-5

JENKINS v. ECKERD CORPORATION

Van Nortwick, J.

In January 1991, Sandhill and K & B Florida Corporation (K & B), a pharmaceutical

retailer, entered into the subject lease (K & B Lease) providing for the rental of a parcel of

real property located in the Gulf Breeze Shopping Center in Gulf Breeze, Florida. Shortly

before the execution of the K & B Lease, Sandhill had leased space in the shopping center to

Delchamps, Inc., a regional supermarket chain, as a so called “anchor” tenant in the

shopping center. Article 2B of the K & B Lease referred to the Delchamps lease and

provided, in pertinent part, as follows:

Article 2

* * *

B. Lessor represents to Lessee that Lessor has entered into leases with the following

named concerns: with Delchamps, Inc. (Delchamps) for a minimum of 45,000 square feet

for supermarket grocery store and that Lessor will construct and offer for lease individual

retail shops for a minimum of 21,000 square feet for various retail uses, all located and

dimensioned shown on the attached Plot Plan, … Lessor further represents that said

(Emphasis added [by court]).

Article 29A of the K & B Lease contained an integration clause which provided that

“[t]his lease contains all of the agreements made between the parties hereto and may not be

modified orally or in any manner other than by an agreement in writing signed by the parties

hereto or their heirs, legal representatives, successors, transferees, or assigns.” The

Delchamps lease included an assignment provision which granted Delchamps “the right, at

any time after the commencement of the term hereof, to assign this lease …”

leased premises. In October 1999, Jitney Jungle, and its affiliates, including Delchamps,

filed for bankruptcy protection under Chapter 11 of the United States Bankruptcy Code.

Thereafter, an order was entered in the bankruptcy proceeding approving Delchamps’

assignment of its lease in the shopping center to Bruno’s Supermarkets, Inc. (Bruno’s). Since

the assignment, Bruno’s has occupied the leased premises under the assigned Delchamps

lease and has operated a Bruno’s grocery store there. Sandhill failed to provide notice to, or

obtain consent from, Eckerd of this assignment.

* * *

At the close of Sandhill’s case, Eckerd moved for, and the trial court granted, a directed

verdict in favor of Eckerd. * * *

The trial court also awarded Eckerd $16,026.04 in damages reflecting the amount of rent

payments made by Eckerd for the period from September 20, 2001, to October 31, 2001.

This appeal ensued.

* * *

It is a fundamental rule of contract interpretation that a contract which is clear, complete,

and unambiguous does not require judicial construction. [Citations.]

* * *

In the case on appeal, the trial court concluded, and we agree, that article 2B of the K &

B Lease clearly and unambiguously gave the lessee the option to cancel the lease if

when a contract on its face appears clear and unambiguous, but fails to specify the rights or

duties of the parties in certain situations. [Citation.] Sandhill submits that, while the

reference in article 2B of the K & B Lease to the Delchamps lease may be “unambiguous”

when read literally, this reference was not “clear” or “complete” with regard to the operation

of the lease should the Del- champs lease be assigned. We cannot agree.

The operation of the parol evidence rule encourages parties to embody their complete

agreement in a written contract and fosters reliance upon the written contract. “The parol

evidence rule serves as a shield to protect a valid, complete and unambiguous written

instrument from any verbal assault that would contradict, add to, or subtract from it, or affect

its construction.” [Citation.] The parol evidence rule presumes that the written agreement

that is sought to be modified or explained is an integrated agreement; that is, it represents the

B. SITUATIONS TO WHICH THE RULE DOES NOT APPLY

1. A contract that is partly written and partly oral; one in which the

parties do not intend the writing to be their entire agreement.

2. A clerical or typographical error that obviously does not represent the

agreement.

3. The lack of contractual capacity of one of the parties, through

minority, intoxication, or mental incompetence, for instance.

4. A defense of fraud, misrepresentation, duress, undue influence,

C. SUPPLEMENTAL EVIDENCE

Although a written agreement cannot be contradicted, evidence of additional

terms may be admissible to explain or supplement a written contract. Such

evidence must be consistent and cannot contradict a provision in the

contract. Under the U.C.C. and Restatement, course of dealing, usage of

trade, and course of performance are often looked to for this type of

evidence.

NOTE: See Figure 15-1 for an illustration of the parol evidence rule.

III. INTERPRETATION OF CONTRACTS

*** Question to Discuss ***

Discuss the rule that aids in the interpretation of a contract.

If the meaning of the written words is ambiguous, the courts may clarify

them by applying rules of interpretation and construction by using

extrinsic (external) evidence where necessary. These rules assist the court

in determining the intended purpose of the unclear terms, the specific