Lohman v. Wagner
54 U.C.C. Rep. Serv. 2d (West) 1057, 160 Md. App. 122, 862 A.2d 1042 (2004)
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Rule of Law:
Under the Uniform Commercial Code's Statute of Frauds, § 2-201, a contract for the sale of goods priced at $500 or more is unenforceable unless it is evidenced by a writing, signed by the party against whom enforcement is sought, that specifies a quantity of goods. A quantity term filled in unilaterally by one party, without the other party's assent, does not satisfy this requirement.
Facts:
- In late 1997, Charles D. Lohman, a pig farmer, contacted John C. Wagner about business opportunities in the pork industry.
- Based on discussions with Wagner about a new pork producer network, Lohman decided to convert his farm into a weaner pig facility.
- In July 1998, Lohman needed financing to remodel his facility and asked Wagner for a sample purchase agreement to show his bank.
- Wagner's wife retyped an old document, which Wagner signed despite it having a blank line for the quantity of pigs, and faxed it to Lohman as a 'sample' or 'draft'.
- The fax cover sheet stated: 'I trust this will help you in securing financing as we had discussed.'
- Without any further communication with Wagner, Lohman wrote '300' into the blank line for the weekly quantity of pigs.
- Lohman provided the altered document to his bank but never sent a copy of the completed agreement back to Wagner.
- Lohman sold pigs to Wagner until October 1998, when Wagner significantly lowered the price he would pay due to market conditions.
Procedural Posture:
- Charles D. Lohman filed a complaint for breach of contract against John C. Wagner and Joyce E. Wagner in the Circuit Court for Washington County, a state trial court.
- After a three-day bench trial, the trial judge entered judgment in favor of the defendants, the Wagners.
- The trial court found that the alleged agreement did not satisfy the quantity requirement of the UCC Statute of Frauds and was therefore unenforceable.
- Lohman, as appellant, appealed the trial court's judgment to the intermediate appellate court.
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Issue:
Does a writing for the sale of goods satisfy the Uniform Commercial Code's Statute of Frauds requirement for a quantity term if the seller unilaterally inserts the quantity into a blank space after the buyer has signed and faxed the document as a 'sample' for financing purposes?
Opinions:
Majority - Meredith, J.
No. A writing does not satisfy the UCC's Statute of Frauds where a quantity term is inserted by one party without the assent of the other. The court reasoned that UCC § 2-201 and its official comments make clear that while many terms can be omitted from a writing, the quantity term is essential for a contract for the sale of goods to be enforceable. Here, Wagner signed and faxed a document explicitly as a 'sample' or 'draft' to help Lohman secure financing, not as a binding contract. The quantity line was left blank, and the trial court found no evidence that Wagner ever discussed or assented to the '300' per week figure that Lohman inserted unilaterally. Because there was no meeting of the minds on the quantity, the writing fails to evidence a contract for a specific quantity and is therefore unenforceable under the Statute of Frauds.
Analysis:
This decision reinforces the centrality of the quantity term as a requirement under the UCC Statute of Frauds for the sale of goods. It clarifies that the quantity must reflect a mutual agreement, not a unilateral assertion, even if one party has signed an otherwise incomplete document. The case serves as a strong precedent against enforcing agreements where essential terms are filled in after signing without the other party's knowledge or consent. It underscores the risk of using signed, incomplete 'draft' or 'sample' documents for ancillary purposes like securing financing, as they cannot be transformed into enforceable contracts by one party's unilateral actions.
