Facts
- Bettie Lewis owned a 1967 Hillcrest mobile home located in Midway Mobile Home Park, owned by Dr. Herbert H. Hughes.
- Lewis attempted to sell the mobile home to third parties, conditioned on the park accepting the purchasers as tenants for the lot.
- Park management suggested the purchasers were unlikely to be accepted due to an asserted rule limiting tenancy by relatives of current residents; Lewis complained to Hughes.
- Through an attorney acting as intermediary, Hughes agreed to buy Lewis’s mobile home at a price communicated by Lewis.
- Hughes later refused to pay the agreed price and did not complete the purchase; Lewis sold to another buyer and sued Hughes for breach of contract seeking damages.
- In a bench trial, the circuit court found an oral contract existed but held it unenforceable under Maryland’s UCC statute of frauds for lack of a sufficient signed writing.
Issues
- Whether the oral contract for sale of the mobile home was unenforceable under Md. Code Ann., Com. Law § 2-201(1) due to the absence of a sufficient signed writing.
- Whether the contract was enforceable under § 2-201(3)(b) because Hughes admitted in court that a contract for sale was made.
- Whether the § 2-201(3)(b) theory was preserved for appellate review where the statute of frauds was not formally pleaded but was argued and decided at trial.
Decision
- The Court of Appeals of Maryland held the statute-of-frauds questions were preserved because the parties litigated compliance with § 2-201 in the trial court and the trial court decided the case on that basis.
- The court enforced the contract under § 2-201(3)(b) based on Hughes’s trial testimony admitting that a contract was made.
- The court declined to decide whether the writing and signature/agency requirements of § 2-201(1) were satisfied.
- The judgment was reversed and the case was remanded for an assessment of Lewis’s damages.
Legal Principles
- Under UCC § 2-201(1), a contract for the sale of goods for $500 or more is generally unenforceable without a writing indicating a contract for sale and signed by the party to be charged or an authorized agent.
- Under UCC § 2-201(3)(b), the writing requirement does not bar enforcement if the party against whom enforcement is sought admits in pleadings, testimony, or otherwise in court that a contract for sale was made (enforceable to the extent of the quantity admitted).
- An “admission” under § 2-201(3)(b) may be involuntary, including testimony elicited on cross-examination, and may consist of factual testimony that establishes contract formation as a matter of law even if the witness disputes liability or enforceability.
- An issue may be preserved for appeal when it is actually tried and decided in the lower court, even if not formally raised in the pleadings.
Conclusion
The court held that the buyer’s in-court admission that an oral sales contract was made brought the agreement within the UCC statute-of-frauds admission exception, requiring reversal and a remand to determine damages notwithstanding the lack of a sufficient signed writing.