Procedural Posture

Plaintiff, a manufacturer, appealed a judgment for defendant, a buyer, from the Superior Court of El Dorado County (California) in plaintiff’s action seeking damages for the breach of an unwritten sales contract pursuant to CalComCode § 2201.

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Overview

Plaintiffdefendant entered negotiations for a prospective contract that would provide for the sale of merchandiseThe merchandise was to be constructed according to defendant’s specificationsThe parties also discussed proposed sales prices at length,in the meantime, plaintiff began ordering the merchandiseDefendant later withdrew from the negotiations, declining to sign any contractual agreementPlaintiff thereafter brought an action for damagesAlthough the lower court recognized the existence of a definite agreement, it rejected enforcementinstead ruled in defendant’s favor because of the parties’ failure to sign a written contractThe appeals court reversed the judgmentremanded for a determination of damagesAlthough CalComCode § 2201 required a written contract for sales of goods exceeding $ 500, an exception applied to circumstances such as in the instant case where goods were manufactured specifically for the buyerThe merchandise to be supplied by plaintiff was of unusual sizecould not be re-sold in the ordinary course of plaintiff’s business.

Outcome

The court reversed the judgmentremanded the case for a determination of damagesplaintiff’s loss resulting from defendant’s breach of an oral sales contractAlthough generally a written contract was required for sales of goods exceeding $ 500, an exception applied to circumstances where goods were manufactured specifically for the buyer.