## Facts

- Ruble Forest Products, Inc. (seller/broker) sold lumber to Lancer Mobile Homes of Oregon, Inc. (buyer/manufacturer) over a course of dealing from 1969 to 1971.
- The disputed transactions were 11 truckloads shipped between August 10 and September 28, 1971, for a total price of $31,091.24.
- Lancer did not pay the full contract price; when contacted, Lancer asserted Ruble had shipped defective lumber over time and demanded an adjustment before paying.
- Ruble’s president testified Lancer’s complaint of defects was largely first raised during the October 1971 call, aside from a prior dropped complaint in 1970.
- Ruble, citing Lancer’s refusal to pay without an adjustment and Ruble’s financing pressures, offered a $2,500 “credit” to induce payment of the remainder.
- Ruble memorialized the $2,500 credit in a signed letter; Lancer then paid the reduced amount (total price minus $2,500).
- Ruble later sued to recover the $2,500 balance; Lancer pled compromise and settlement based on defective-lumber claims.

## Issues

1. Whether substantial evidence supported the trial court’s finding that the parties had a bona fide, good-faith dispute over defects and agreed to settle it by a $2,500 credit.
2. Whether the $2,500 credit was enforceable as (a) a compromise and settlement of a disputed claim and/or (b) a UCC § 2-209 good-faith modification not requiring consideration.
3. Whether Ruble could avoid the credit based on alleged coercion, lack of consideration, or Lancer’s allegedly deficient notice of defects.

## Decision

- The Oregon Supreme Court affirmed the judgment for Lancer.
- The court held substantial evidence supported the trial court’s findings that Lancer asserted its defective-lumber claim in good faith and that a bona fide controversy existed.
- The $2,500 credit barred Ruble’s attempt to recover that amount as a valid compromise and settlement of a disputed claim.
- Independently, the credit was enforceable as a UCC § 2-209 modification made in good faith, for which additional consideration was not required.
- The signed letter satisfied any statute-of-frauds requirement applicable to a modification of a sale-of-goods contract.
- Claims of coercion and arguments about notice of breach did not defeat the settlement where the trial court found good faith and the settlement’s validity did not turn on whether the underlying defect claim would have succeeded.

## Legal Principles

- In an action at law tried to the court, appellate review of fact-finding is deferential; findings are affirmed if supported by substantial evidence.
- A compromise and settlement is enforceable if based on an honestly asserted, bona fide dispute, even if the underlying claim might not ultimately prevail.
- Under UCC § 2-209, a contract for the sale of goods may be modified without consideration if the modification is made in good faith.
- A signed writing evidencing the modification may satisfy statute-of-frauds requirements for modifications of sale-of-goods contracts.
- Hard bargaining in the context of an asserted good-faith dispute, without more, does not invalidate a settlement as economic coercion.

## Conclusion

The court enforced the parties’ written $2,500 credit because substantial evidence showed a good-faith dispute over defective lumber and a valid settlement, and because UCC § 2-209 permits good-faith modifications of sale-of-goods contracts without new consideration.


Ruble Forest Products, Inc. v. Lancer Mobile Homes of Or., Inc., 524 P.2d 1204 (Or. 1974)