Facts
- Office Pavilion South Florida, Inc. (Pavilion) was the exclusive distributor of certain Herman Miller office products in South Florida.
- ASAL Products, Inc. (ASAL) was formed to buy Herman Miller products from Pavilion for resale in Europe.
- In December 1998, Pavilion and ASAL executed a two-year written contract for keyboard trays that set a minimum annual purchase and a maximum monthly supply, and the parties performed under it without dispute.
- In 1999, ASAL sought to add Herman Miller Aeron chairs and began marketing them in Europe.
- Pavilion sent writings and the parties later signed an addendum setting chair pricing and referencing “terms and conditions” of the earlier agreement, but expressly excluding its delivery-time and quantity provisions.
- The chair-related writings provided prices and stated delivery would occur within normal lead times, but did not obligate ASAL to purchase any minimum number of chairs and did not state any quantity term for chairs.
- After a successful trade show, ASAL submitted an order for 2,480 chairs; Pavilion refused, stating it lacked authority to supply chairs for ASAL’s expanded resale plans.
- ASAL sued for breach of contract based on Pavilion’s refusal to supply the chairs; a jury awarded ASAL $4,000,000 in lost profits, and Pavilion appealed.
Issues
- Whether the alleged modification adding Aeron chairs was enforceable where ASAL made no binding commitment to purchase any chairs, rendering its promise illusory and lacking consideration.
- Whether the alleged chair agreement was unenforceable under Florida’s UCC statute of frauds because the writings did not include a quantity term for chairs.
Decision
- The appellate court reversed the judgment for ASAL and directed entry of judgment for Pavilion on the chair-contract claim.
- The court held the purported chair modification failed for lack of consideration because ASAL was not obligated to buy any chairs, making its promise optional.
- The court also held the chair writings failed the UCC statute of frauds because they stated no quantity and thus were unenforceable beyond a quantity “shown in” the writing—here, none.
Legal Principles
- A contract modification must be supported by consideration; a party’s optional or illusory promise does not constitute consideration for the other party’s promise.
- For a sale of goods of $500 or more, the UCC statute of frauds requires a signed writing indicating a contract and stating a quantity; without a quantity term, the contract is unenforceable.
- Price lists, lead times, or general commitments to supply goods do not satisfy the UCC statute of frauds absent a stated quantity.
- A valid, performed agreement for one product line does not make enforceable a separate attempted modification for a different product where the modification lacks consideration and fails the statute of frauds.
Conclusion
The court set aside ASAL’s lost-profits verdict because the alleged agreement to supply Aeron chairs was not an enforceable contract modification: ASAL undertook no binding purchase obligation (no consideration), and the writings lacked the quantity term required by Florida’s UCC statute of frauds.