Unilateral performance is solid evidence that there really is a contract. Almost the whole purpose of contracts is to protect the party who performs first from being taken advantage of by the other party, so if a party performs first there is some basis for inferring that he had a contract.
Plaintiff manufacturer claimed that defendant distributor breached a contract to purchase $ 27 million worth of plaintiff's goods over ten years. Two memoranda outlining the agreement evidenced the oral contract as did the fact that plaintiff terminated its former distributor and delivered its entire distribution operation to defendant. The district judge dismissed the suit, on the defendant's motion for summary judgment, as barred by the statute of frauds.
Was the case barred by the statute of frauds?
The Court reversed the dismissal upon a finding that it was not barred by the Uniform Commercial Code or the Illinois statute of frauds because a writing sufficient to evidence the existence of the contract was supported by unilateral performance. The rule was satisfied by either memoranda in conjunction with unilateral performance by plaintiff, even though the first memorandum was made before the contract was concluded. The court found that the second memorandum was a writing sufficient to evidence the existence of the contract, satisfying the statute of frauds in the Uniform Commercial Code even if the partial-performance doctrine was not available to plaintiff under the UCC for sales of goods.