Lige Dickson Co. v. Union Oil Co. of California
96 Wash. 2d 291, 635 P.2d 103, 32 U.C.C. Rep. Serv. (West) 705 (1981)
Rule of Law:
The doctrine of promissory estoppel cannot be used to enforce an oral contract for the sale of goods that is otherwise unenforceable under the Uniform Commercial Code's Statute of Frauds (RCW 62A.2-201).
Facts:
- Lige Dickson Company, a general contractor, maintained a long-standing business relationship purchasing oil-based products from Union Oil Company starting in 1937.
- Union Oil encouraged Lige Dickson to enter the asphalt paving business and served as its primary supplier of liquid asphalt from 1964 through 1973 without ever executing a written contract.
- In 1971, facing rising market prices, Lige Dickson requested price protection from Union Oil for its existing paving contracts.
- Union Oil orally promised that any future price increases would not apply to Lige Dickson's existing contracts, and Lige Dickson relied on this promise when making bids.
- In November 1973, Union Oil reneged on this promise, informing Lige Dickson that prices would rise by $3 per ton for all purchases after December 31, 1973, regardless of prior agreements.
- Lige Dickson was forced to purchase asphalt at the increased prices to fulfill its existing paving obligations.
- Lige Dickson incurred out-of-pocket costs of $39,006.50 due to the price increase and was unable to bid on new contracts during early 1974 due to supply uncertainty.
Procedural Posture:
- Lige Dickson Company sued Union Oil Company for breach of contract in the United States District Court for the Western District of Washington.
- The District Court found that an oral contract existed but held it was unenforceable due to the Statute of Frauds (RCW 62A.2-201).
- Lige Dickson Company appealed the decision to the United States Court of Appeals for the Ninth Circuit.
- The Ninth Circuit certified the specific legal question regarding promissory estoppel to the Supreme Court of Washington for determination.
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 doctrine of promissory estoppel render an oral promise for the sale of goods enforceable under Washington law, notwithstanding the requirement of a writing under the Uniform Commercial Code's Statute of Frauds?
Opinions:
Majority - Justice Dore
No, the doctrine of promissory estoppel generally cannot override the specific statutory requirements of the Uniform Commercial Code (UCC) Statute of Frauds. The court reasoned that the UCC (RCW 62A.2-201) was adopted to simplify, clarify, and modernize commercial law and to ensure uniformity among jurisdictions. The statute already provides specific exceptions for when an oral contract may be enforced (such as specially manufactured goods or admissions in court). The court held that adopting Restatement (Second) of Contracts § 217A—which allows enforcement based on reliance—would erode the UCC's purpose and create confusion and litigation. If the general equitable principles of UCC § 1-103 were allowed to displace the specific writing requirements of § 2-201, the Statute of Frauds would become meaningless. The court aligned itself with jurisdictions like California and Kentucky, rejecting the minority view (Iowa) that allows estoppel to defeat the statute.
Concurring - Justice Rosellini
Yes, I agree with the majority's conclusion that promissory estoppel cannot supersede the UCC, but I write separately to highlight a potential statutory remedy. The Justice reasoned that the legislature carefully selected the specific exceptions to the writing requirement listed in the Act, and promissory estoppel was not included. However, the Justice noted that UCC § 2-201(3)(b) allows enforcement if the party against whom enforcement is sought admits in court that a contract was made. While findings in the lower court suggested such an admission might have occurred, the certified question was limited strictly to the issue of promissory estoppel.
Analysis:
This decision represents a strict textualist approach to the Uniform Commercial Code, prioritizing commercial certainty and statutory uniformity over individual equitable relief. By refusing to adopt Restatement § 217A in the context of goods sales, the Washington Supreme Court signaled that sophisticated commercial parties must adhere to statutory formalities (writings) to ensure contract enforceability. This ruling prevents the 'eroding' of the Statute of Frauds by closing the door on reliance-based arguments in sales of goods, distinguishing Washington from jurisdictions that allow equity to cure statutory defects.
