Jannusch v. Naffziger

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

 

RULE:

It is not necessary that the parties share a subjective understanding as to the terms of a contract; the parties' conduct may indicate an agreement to the terms.

FACTS:

Plaintiffs entered into an oral agreement to sell its business  to defendants for $ 150,000. For the $ 150,000, defendants would receive the truck and trailer, all necessary equipment, and the opportunity to work at event locations secured by plaintiffs. Defendants 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. Plaintiff brought an action for breach of an oral contract against defendants. One of the defendants acknowledged testifying during a deposition that an oral agreement to purchase Festival Foods for $ 150,000 existed but later testified she could not recall specifically making an oral agreement on any particular date. The other defendant testified that they met with plaintiffs on August 13, 2005, and paid the $ 10,000 for the right to continue to purchase the business because plaintiffs had another interested buyer. She also stated that the parties agreed defendants would run Festival Foods as they pursued buying the business. Following a bench trial, the trial court found in favor of defendants. The trial court then found 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. 

ISSUE:

Did a valid and enforceable oral contract exist between the parties?

ANSWER:

Yes.

CONCLUSION:

The oral agreement was covered by the Uniform Commercial Code (UCC), 810 Ill. Comp. Stat. Ann. 5/1-101 et seq. (2004). 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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