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Jannusch v. Naffziger - 379 Ill. App. 3d 381, 318 Ill. Dec. 480, 883 N.E.2d 711 (2008)

Rule:

The Uniform Commercial Code, 810 Ill. Comp. Stat. Ann. 5/2-201(1) (2004) requires that contracts for the sale of goods in excess of $ 500 be in writing. However, a contract is enforceable even though it does not meet the requirements of subsection (1) if it is valid in other respects and the party against whom enforcement is sought admits in his pleading, testimony, or otherwise in court that a contract for sale was made. 810 Ill. Comp. Stat. Ann. 5/2-201(3)(b) (2004). Also, an oral contract for the sale of goods which has been partially performed is enforceable. 810 Ill. Comp. Stat. Ann. 5/2-201(3)(c) (2004). 

Facts:

The sellers operated a business, Festival Foods, which served concessions to the general public at festivals and events throughout Illinois and Indiana from late April to late October each year. Buyers were interested in purchasing the concession business, met several times with the sellers, and observed the business in operation. The sellers entered into an oral agreement to sell Festival Foods to the buyers for $ 150,000. The buyers made a $10,000 payment on the sellers mobile food concession business, immediately taking possession of the assets of the business and operating the business for the remainder of a festival season. At the end of the festival season, the sellers still did not receive the remainder of the purchase price and they filed an action for breach of an oral contract of sale. The trial court ruled in favor of the buyers finding that there was a contract formed but that the evidence was insufficient to establish by a preponderance of the evidence that there was a meeting of the minds as to what that agreement was. Thus, no sale took place. The sellers appealed.

Issue:

Did the buyers breach the oral contract?

Answer:

Yes

Conclusion:

The appellate court reversed the trial court's judgment and remanded the case for entry of an order consistent with the appellate court's opinion. The oral agreement was covered by the Uniform Commercial Code (UCC). Thus, it was enforceable under exceptions to the UCC Statute of Frauds found in 810 Ill. Comp. Stat. Ann. 5/2-201(3) (2004). The essential terms were agreed upon. The purchase price was $ 150,000, and the items to be transferred were specified. No essential terms remained to be agreed upon. The buyers took possession of the items to be transferred and used them as their own. The fact that the buyers were disappointed in the income from the festivals was not inconsistent with the existence of a contract. Further, one buyer admitted in deposition that there was an agreement to purchase the business for $ 150,000. The buyers breached the agreement when they failed to pay the additional purchase price and returned the business assets at the end of the festival season.

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