Gross Valentino Printing Company v. Frederick S. Clarke

Illinois Appellate Court — First District (1st Division)
120 Ill. App. 3d 907, 458 N.E.2d 1027 (1983)

ELI5:

Rule of Law:

A contract for the printing of magazines is considered a contract for the sale of goods under the Uniform Commercial Code (UCC) when the primary purpose of the agreement is the transfer of a tangible, movable product. Consequently, modifications to such contracts do not require new consideration to be legally binding pursuant to UCC § 2-209(1).

Facts:

In July 1979, Gross Valentino Printing Company sent magazine publisher Frederick S. Clarke a price quotation of $6,695 for printing a magazine, which Clarke accepted.
On August 8, 1979, Clarke brought printing materials to Gross Valentino's office, where an agent assured him that despite layout issues, the job could be done 'in house' and the price would remain the same for future issues.
On August 14, 1979, the agent informed Clarke by phone that the cost would be higher because some work had to be outsourced.
Clarke did not immediately protest or seek another printer, fearing he would miss his deadline and that Gross Valentino would retain his necessary printing materials.
Shortly after, Gross Valentino sent Clarke a letter dated August 15, 1979, increasing the price for the same work to $9,300.
On August 30, 1979, upon delivery of the first batch of magazines, Clarke signed a purchase order reflecting the new price and made a partial payment of $4,650.
After receiving the complete order of 15,000 magazines, Clarke informed Gross Valentino on October 28, 1979, that he would not accept the price increase.

Procedural Posture:

Gross Valentino Printing Company (plaintiff) sued Frederick S. Clarke (defendant) in a state trial court for breach of contract.
Clarke raised affirmative defenses, including lack of consideration for the price increase.
Gross Valentino moved for summary judgment.
The trial court granted partial summary judgment for Gross Valentino, striking the defenses of lack of consideration and business compulsion.
After Clarke amended his fraud defense, Gross Valentino renewed its motion for summary judgment.
The trial court granted the renewed motion for summary judgment, entering judgment for Gross Valentino in the amount of $5,116.20.
Clarke (appellant) appealed the trial court's judgment to the Illinois Appellate Court, First District (intermediate appellate court).

Premium Content

Subscribe to Lexplug to view the complete brief

You're viewing a preview with Rule of Law, Facts, and Procedural Posture

Issue:

Does the Uniform Commercial Code (UCC) apply to a contract for the printing of magazines, thereby classifying the transaction as a sale of 'goods' and permitting a modification of the contract's price term without new consideration?

Opinions:

Majority - Justice Goldberg

Yes, the Uniform Commercial Code applies because a contract for printing magazines is predominantly a contract for the sale of goods. The primary subject of this contract was the tangible, movable magazines, not the printing services, which were merely incidental to the production of the final product. Because the transaction is governed by the UCC, the modification to the contract's price term is binding without the need for new consideration under UCC § 2-209(1). The court reasoned that Clarke was primarily interested in the final product at the lowest price, suggesting the services were fungible and secondary to the goods. The court also rejected Clarke's defenses of fraud and business compulsion, finding he failed to allege a false statement of a present material fact or any wrongful act by Gross Valentino that deprived him of his free will.

Analysis:

This decision clarifies the application of the 'predominant purpose' test for hybrid contracts involving both goods and services in Illinois. By classifying a contract for mass-produced printed materials as a sale of goods, the court subjects these common commercial transactions to the rules of the UCC. This holding reinforces the UCC's goal of commercial flexibility, particularly by upholding contract modifications without new consideration, but it also places the onus on parties to promptly and clearly object to proposed changes. The case serves as a key precedent for distinguishing between goods and services in manufacturing and publishing contexts.

Gunnerbot

AI-powered case assistant

Loaded: Gross Valentino Printing Company v. Frederick S. Clarke (1983)

Try: "What was the holding?" or "Explain the dissent"