Office Pavilion S. Florida, Inc. v. ASAL Prods., Inc.
849 So.2d 367 (2003)
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Rule of Law:
An agreement for the sale of goods is unenforceable for lack of consideration if one party's promise is illusory, meaning it does not obligate them to any performance. Furthermore, under the Statute of Frauds, a contract for the sale of goods is unenforceable if it lacks an essential term, such as quantity.
Facts:
- Office Pavilion South Florida, Inc. ('Pavilion') and ASAL Products, Inc. ('ASAL') entered a two-year contract where ASAL agreed to purchase a minimum of 1,000 keyboard trays per year from Pavilion.
- Approximately one month later, the parties negotiated to amend their agreement to include the sale of Herman Miller Aeron chairs.
- Pavilion sent ASAL a letter with pricing for the chairs, which explicitly stated that the original contract's paragraphs regarding delivery times and quantities would not apply to the chairs.
- The proposed amendment for the chairs did not contain any provision requiring ASAL to purchase a minimum quantity.
- After marketing the chairs in Germany, ASAL attempted to place an order for 2,450 chairs.
- Pavilion refused to fill the order, stating its supplier, Herman Miller International, would not approve the sale to ASAL's expanded territory.
Procedural Posture:
- ASAL Products, Inc. sued Office Pavilion South Florida, Inc. in a Florida trial court for breach of contract.
- At trial, Pavilion moved for a directed verdict, arguing the contract was unenforceable, but the trial court denied the motion.
- A jury returned a verdict in favor of ASAL, awarding $4,000,000 in damages.
- The trial court entered a final judgment consistent with the jury's verdict.
- Office Pavilion, as appellant, appealed the judgment to the District Court of Appeal of Florida, Fourth District, with ASAL as the appellee.
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Issue:
Does an agreement for the sale of goods, which obligates a seller to supply any quantity ordered but does not obligate the buyer to order any minimum quantity, constitute an enforceable contract supported by consideration?
Opinions:
Majority - Warner, J.
No. An agreement for the sale of goods that obligates the seller to fill orders but imposes no obligation on the buyer to place any orders is unenforceable for lack of consideration. A promise must be supported by consideration to be enforceable, and where promises are exchanged, an illusory promise that does not actually commit the promisor to any action is not valid consideration. In this case, ASAL's promise to purchase chairs was illusory because it reserved the choice to order any quantity, including zero. The court rejected ASAL's arguments that its marketing efforts constituted consideration, as these were not required by the contract. Furthermore, the agreement is independently unenforceable under the Uniform Commercial Code's Statute of Frauds, which requires a contract for the sale of goods to specify a quantity term to be enforceable.
Analysis:
This decision reinforces the fundamental contract principle that mutuality of obligation is essential for an enforceable agreement, particularly in the context of sales of goods. The court's ruling clarifies that a 'hunting license' arrangement, where one party has the option but not the obligation to purchase, lacks the necessary consideration to form a binding contract. This case serves as a strong precedent emphasizing the critical importance of including a definite quantity term in contracts for the sale of goods to satisfy the Statute of Frauds. It warns businesses against relying on indefinite or optional purchase agreements, as courts will deem them illusory and unenforceable.
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