## Facts

- ReMapp International Corporation manufactured electronic components to customer specifications; Comfort Keyboard Company, Inc. bought custom circuit boards from ReMapp over a six-to-seven-year relationship.
- The parties’ established practice was that Comfort’s president placed orders by phone, ReMapp issued a pro forma invoice reflecting price and payment terms, Comfort paid 50% upon receipt of the pro forma invoice, and paid the remaining 50% within 30 days after shipment.
- In 2006, Comfort’s president verbally ordered (and later increased) quantities of two custom products: USB boards and HUB boards, each ultimately totaling 2,000 units.
- Comfort also authorized ReMapp to buy microprocessors for the boards if ReMapp could obtain them for less than $6 each; ReMapp secured them at $5.85 and, after verbal authorization, purchased 4,100 microprocessors and invoiced Comfort.
- ReMapp sent pro forma invoices for the boards and an invoice for the microprocessors; Comfort did not pay the customary 50% up-front amounts but continued communications about production and did not instruct ReMapp to stop manufacturing.
- After ReMapp requested payment for the manufactured boards, Comfort stated it would use a different supplier and refused to pay for the boards or the microprocessors.

## Issues

1. Whether the evidence supported findings that the parties formed enforceable oral contracts for the boards and microprocessors, rather than mere contingent offers dependent on advance payment.
2. Whether UCC Article 2’s statute of frauds barred enforcement of the oral contracts, or whether exceptions applied for (a) specially manufactured goods (boards) and (b) merchants’ written confirmations (microprocessors).

## Decision

- The Seventh Circuit affirmed the judgment for ReMapp.
- The court upheld the finding of three oral contracts: USB boards, HUB boards, and microprocessors.
- The board contracts were enforceable under the UCC specially manufactured goods exception because the boards were custom, not suitable for ordinary resale, and ReMapp substantially began manufacture before any repudiation.
- The microprocessor contract was enforceable under the UCC merchants’ written confirmation exception because ReMapp’s invoice confirmed the deal between merchants and Comfort did not object in writing within the statutory period.
- The court affirmed damages of $67,560 for the board contracts; it did not disturb the denial of microprocessor damages based on ReMapp’s failure to mitigate.

## Legal Principles

- A long-standing course of dealing can support a finding of mutual assent to an oral contract for the sale of goods; invoices may function as confirmations of an existing oral agreement rather than new offers.
- Contract formation is not defeated merely because a buyer fails to make an agreed advance payment when the factfinder reasonably treats payment terms as performance obligations, not conditions precedent to formation.
- Under UCC § 2-201(3)(a), an oral contract for goods over $500 is enforceable when the goods are specially manufactured for the buyer, are not suitable for sale to others in the ordinary course of business, and the seller has made a substantial beginning of manufacture or commitments before repudiation.
- Under UCC § 2-201(2), between merchants, a writing sufficient against the sender that confirms an oral contract satisfies the statute of frauds against the recipient if the recipient has reason to know its contents and does not object in writing within 10 days.

## Conclusion

The Seventh Circuit held that the parties’ course of dealing supported enforceable oral contracts and that UCC statute-of-frauds defenses failed because the custom boards fell within the specially manufactured goods exception and the microprocessor agreement was confirmed by an unobjected-to merchant invoice.


ReMapp Int’l Corp. v. Comfort Keyboard Co., 560 F.3d 628 (7th Cir. 2009)