## Facts

- Gene and Martha Jannusch operated “Festival Foods,” a seasonal concessions business selling food at festivals in Illinois and Indiana.
- The business assets included a truck, trailer, and substantial equipment used to operate at events (e.g., refrigeration, roasters, tables, signage, and lighting).
- Lindsey and Louann Naffziger sought to purchase the business and observed it in operation.
- On August 13, 2005, the parties made an oral agreement for defendants to buy Festival Foods for $150,000, including the truck, trailer, necessary equipment, and the ability to work event locations previously secured by plaintiffs.
- Defendants paid $10,000 immediately; the balance was to be paid after they obtained bank financing.
- Defendants took possession the next day and operated the business for the remainder of the season, receiving income, buying inventory, replacing some equipment, paying taxes, and paying employees.
- Titles and insurance for the truck and trailer remained in plaintiff Gene Jannusch’s name because the full price was not paid.
- Defendants later decided not to complete the purchase, returned the truck and trailer, and stopped operating the business.
- Plaintiffs sued for breach of contract, seeking damages including the unpaid portion of the price and related losses.
- After a bench trial, the circuit court applied UCC Article 2 but entered judgment for defendants, finding no meeting of the minds and indefiniteness; plaintiffs appealed.

## Issues

1. Whether the parties’ oral agreement was sufficiently definite to constitute an enforceable contract for sale.
2. Whether the transaction’s predominant purpose was the sale of goods such that UCC Article 2 governed.
3. Whether defendants’ payment and performance, followed by returning the assets, evidenced breach of an existing contract rather than failed negotiations.

## Decision

- The appellate court reversed.
- The court held the transaction was predominantly a sale of goods and thus governed by UCC Article 2.
- The court held an enforceable oral contract existed: the essential terms (price and subject matter) were sufficiently definite and the parties’ conduct recognized a contract.
- Defendants’ taking possession, operating the business, and paying $10,000 constituted performance consistent with contract formation; returning the assets did not negate formation and instead amounted to breach.
- The case was remanded with directions to enter judgment for plaintiffs and determine damages.

## Legal Principles

- A mixed transaction involving goods and non-goods is governed by UCC Article 2 when the predominant purpose is the sale of goods.
- Under UCC § 2-204, a contract for sale may be formed by conduct recognizing an agreement, and it does not fail for indefiniteness if the parties intended to contract and there is a reasonably certain basis for a remedy.
- Agreement on price and identification of the goods to be transferred can be sufficient for enforceability even if some ancillary terms are unresolved.
- Partial payment and receipt/acceptance of goods may support enforceability of an oral contract under UCC Statute of Frauds exceptions.
- A buyer’s later decision to return goods after operating the business is consistent with breach of an existing contract, not absence of mutual assent.

## Conclusion

The appellate court held that the parties formed an enforceable oral contract governed by UCC Article 2 for the sale of the business’s tangible assets, and that defendants’ partial payment and operation of the business confirmed assent; their later return of the assets constituted breach requiring entry of judgment for plaintiffs and a damages determination on remand.


Jannusch v. Naffziger, 883 N.E.2d 711 (Ill. App. Ct. 2008)