## Facts

- Monetti, S.P.A., an Italian manufacturer, marketed products in the United States through its wholly owned subsidiary, Melform U.S.A., Inc.
- Monetti negotiated with the Schneiders (importers of food-service products) for an exclusive U.S. distributorship and a transfer of Melform’s business assets.
- During negotiations, the Schneiders’ importing firm was sold to Anchor Hocking Corporation and became an Anchor division; the Schneiders initially remained in charge.
- Anchor sent a telex requesting that Monetti prepare an agreement “formalizing” Anchor’s exclusive distributorship for the United States.
- Relying on the proposed exclusivity arrangement, Monetti terminated Melform’s existing distributors and notified customers that Anchor would become the exclusive U.S. distributor effective December 31, 1984.
- At a December 18, 1984 meeting, Monetti presented a draft providing for (among other terms) a ten-year exclusive U.S. distributorship and minimum annual purchases totaling approximately $27 million.
- Anchor did not sign Monetti’s draft, but Anchor employees created internal memoranda closely tracking the draft’s terms; at least one memorandum was initialed, and another on Anchor letterhead was labeled a “summary agreement.”
- Monetti transferred Melform’s business and assets as contemplated, but the relationship later deteriorated; Monetti sued for breach of the alleged ten-year distribution contract.
- The district court granted Anchor summary judgment on statute-of-frauds grounds and denied leave to amend the complaint to add promissory estoppel.

## Issues

1. Whether writings associated with Anchor, though not a signed integrated contract, satisfied UCC § 2-201 and/or Illinois’s general statute of frauds for an alleged ten-year exclusive distribution agreement.
2. Whether summary judgment was proper on statute-of-frauds grounds given the writings and the parties’ conduct.
3. Whether denial of leave to amend to add a promissory estoppel claim was erroneous.

## Decision

- The Seventh Circuit reversed the grant of summary judgment and remanded.
- The court held the statute of frauds did not bar enforcement because the Anchor memoranda, together with the surrounding circumstances, could constitute a sufficient signed writing under UCC § 2-201 and also satisfied Illinois’s general statute of frauds.
- Because the contract claim was not barred, the challenge to the denial of leave to amend to add promissory estoppel was effectively moot.

## Legal Principles

- UCC § 2-201 requires a signed writing sufficient to indicate that a contract for sale has been made; it does not require a fully integrated, formally executed contract.
- A memorandum can satisfy UCC § 2-201 even if it is internal, not labeled as the contract, or created before the parties treat the contract as “officially” formed, so long as it adequately evidences the agreement.
- Multiple writings may be read together to supply the memorandum required by the statute of frauds if they identify the transaction and reasonably reflect essential terms.
- Evidence of reliance and performance may corroborate the reliability and meaning of the writings when evaluating whether the statute of frauds is satisfied.
- Where the writings satisfy the statute of frauds, equitable theories aimed at avoiding the statute (such as promissory estoppel) may be unnecessary to pursue contract remedies.

## Conclusion

The Seventh Circuit held that internal, signed corporate memoranda describing the parties’ exclusive distributorship arrangement could satisfy the statute of frauds under both UCC § 2-201 and Illinois law, making summary judgment improper and permitting the breach-of-contract claim to proceed on remand.


Monetti, S.P.A. v. Anchor Hocking Corp., 931 F.2d 1178 (7th Cir. 1991)