Sedmak v. Charlie's Chevrolet, Inc.

Missouri Court of Appeals, Eastern District, Division Four
622 S.W.2d 694 (1981)

ELI5:

Rule of Law:

Under the Uniform Commercial Code, specific performance is a proper remedy for the breach of a contract to sell goods that are unique or in other proper circumstances, such as being of limited availability and difficult to obtain elsewhere. Furthermore, an oral contract for a single, indivisible good is enforceable under the Statute of Frauds when the buyer has made a partial payment.

Facts:

Dr. and Mrs. Sedmak, who were automobile enthusiasts, learned that Chevrolet was producing a limited edition Corvette to commemorate its selection as the Indianapolis 500 Pace Car.
In November 1977, the Sedmaks spoke with Tom Kells, a sales manager at Charlie's Chevrolet, Inc., who told them they could purchase one if the dealership received an allocation.
On January 9, 1978, Mrs. Sedmak went to Charlie's and gave Kells a check for $500 as a deposit on the Pace Car.
Kells told Mrs. Sedmak the price would be the manufacturer's suggested retail price, approximately $15,000, and agreed to order the car with specific options requested by the Sedmaks.
The Sedmaks also agreed to allow Charlie's to keep the car in its showroom for a period for promotional purposes.
On April 3, 1978, Kells informed the Sedmaks that the Pace Car had arrived.
Kells then told the Sedmaks they could not purchase the car for the retail price because high demand had inflated its value.
Instead of honoring the agreement, Kells stated that the Sedmaks would have to bid on the car.

Procedural Posture:

Dr. and Mrs. Sedmak (plaintiffs) filed a suit for specific performance against Charlie’s Chevrolet, Inc. (defendant) in a Missouri trial court.
The trial court found that an oral contract existed, that it was excepted from the Statute of Frauds, and that the Sedmaks were entitled to specific performance.
The trial court entered a decree ordering Charlie's to make the automobile available for delivery to the Sedmaks.
Charlie’s Chevrolet, Inc. (appellant) appealed the trial court's decree to the Missouri Court of Appeals, with the Sedmaks as the appellees.

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Issue:

Is specific performance an appropriate remedy for the breach of an oral contract to sell a limited edition automobile where the buyer made a partial payment and a comparable vehicle cannot be easily obtained on the open market?

Opinions:

Majority - Satz, J.

Yes, specific performance is an appropriate remedy. The court found that a valid oral contract existed because the parties agreed upon the goods and a method for determining the price (the manufacturer's suggested retail price), which is sufficiently definite. This oral contract is not barred by the Statute of Frauds under UCC § 2-201(3)(c) because the Sedmaks' $500 deposit constitutes part payment. For an indivisible commercial unit like a single automobile, part payment validates the contract for the entire unit, as there is no dispute about quantity. Finally, specific performance is a proper remedy under UCC § 2-716, which allows it for 'unique' goods or in 'other proper circumstances.' The limited production of the Pace Car, its high demand, and the specific options ordered by the Sedmaks made it difficult, if not impossible, to obtain a substitute without considerable expense, trouble, and delay, thus constituting 'other proper circumstances' justifying the equitable remedy.

Analysis:

This case is significant for its liberal interpretation of two key UCC provisions. First, it clarifies that the part-payment exception to the Statute of Frauds applies to the entirety of an indivisible good, preventing sellers from using the statute to escape a bargain after accepting a deposit. Second, it reinforces the modern trend of broadening the availability of specific performance for the sale of goods. The decision confirms that 'uniqueness' is not limited to one-of-a-kind heirlooms but extends to items that are merely difficult to replace due to market conditions, scarcity, or specific configurations, solidifying specific performance as a viable remedy for consumers when a seller breaches a contract for high-demand or limited-edition products.

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