Southwest Engineering Co. v. Martin Tractor Co., Inc.
473 P.2d 18 (1970) 205 Kan. 684 (1970)
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Rule of Law:
Under the Uniform Commercial Code (UCC), a contract for the sale of goods over $500 is enforceable if there is a writing sufficient to indicate a contract has been made, is signed by the party against whom enforcement is sought, and states a quantity. Such a contract does not fail for indefiniteness if terms like payment are omitted, as the UCC provides that payment is due at the time and place of delivery unless otherwise agreed.
Facts:
- On April 12, 1966, Ken Hurt of Martin Tractor Company, Inc. provided a verbal price quote of $18,500 to R.E. Cloepfil of Southwest Engineering Company, Inc. for a generator.
- After Southwest used the quote to successfully bid on a government project, Hurt and Cloepfil met on April 28, 1966.
- At the meeting, Hurt raised the price for the specified generator to $21,500 and also offered an alternative model for $15,000.
- Hurt created a handwritten memorandum detailing the components, prices, and quantities for the two generator options.
- The memorandum was headed with the handprinted words 'Ken Hurt, Martin Tractor, Topeka, Caterpillar' and was given to Cloepfil as a record of their agreement.
- During their conversation, the parties briefly discussed different customary payment terms but did not reach a specific agreement on that point.
- On May 24, 1966, Martin sent a letter to Southwest withdrawing all prior quotations and subsequently refused to sell the equipment.
- Southwest ultimately purchased the required generator from another supplier for $27,541.
Procedural Posture:
- Southwest Engineering Company, Inc. filed an action against Martin Tractor Company, Inc. in a Kansas trial court for breach of contract.
- After a trial to the court (a bench trial), the court entered judgment in favor of the plaintiff, Southwest.
- The defendant, Martin Tractor Company, Inc., appealed the trial court's judgment.
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Issue:
Does a handwritten memorandum that identifies the goods, states a quantity, and is authenticated by the seller's agent constitute an enforceable contract under the Uniform Commercial Code's Statute of Frauds (UCC § 2-201), even if the parties did not agree upon the terms of payment?
Opinions:
Majority - Fontron, J.
Yes. A handwritten memorandum identifying goods, stating a quantity, and authenticated by the seller's agent creates an enforceable contract under the UCC, even if payment terms are omitted. The court reasoned that the memorandum satisfied the three essential requirements of the UCC's Statute of Frauds, § 2-201: it evidenced a contract for the sale of goods, it specified a quantity, and it was 'signed' by the party to be charged. The court found that the handprinted name 'Ken Hurt' at the top of the memorandum was a sufficient authentication under UCC § 1-201(39), as it was a symbol adopted with the present intent to authenticate the writing. Although the parties failed to agree on payment terms, UCC § 2-204(3) provides that a contract does not fail for indefiniteness if the parties intended to make a contract. In such cases, the UCC's 'gap-filler' provision, § 2-310, supplies the missing term by establishing that payment is due at the time and place of delivery. Therefore, a valid and enforceable contract was formed at the Springfield meeting.
Analysis:
This decision illustrates the UCC's significant liberalization of contract formation rules, moving away from the strict common law requirement that all material terms be agreed upon. It establishes that the writing required by the Statute of Frauds (§ 2-201) is minimal, serving primarily as evidence that a real transaction occurred. The case solidifies the power of the UCC's 'gap-filler' provisions to save contracts that would have failed for indefiniteness at common law. This ruling promotes commercial efficiency by recognizing and enforcing agreements that reflect the practical realities of business dealings, even when they lack formal precision.
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