Facts
- Southwest Engineering Co., Inc., a general contractor, prepared a bid for a U.S. Corps of Engineers runway-lighting project and sought pricing from Martin Tractor Co., Inc. for a standby generator and accessories.
- Martin’s engine department manager quoted $18,500 by telephone; Southwest relied on that figure in submitting its prime-contract bid.
- After Southwest received the prime contract, the parties met in Springfield, Missouri, where Martin stated the price was $21,500.
- The trial court found the parties reached an agreement at the meeting for sale of a specified generator and accessories for $21,500, and also discussed an alternate generator for $15,000 if the government approved the substitution.
- At the meeting, Martin’s manager prepared and gave Southwest a handwritten memorandum describing the equipment, listing the prices for the primary and alternate equipment, and writing Martin’s name on the document.
- Southwest later sent a letter directing Martin to proceed with shop drawings and proposing payment terms differing from those discussed orally.
- Martin later sent a letter withdrawing its quotation and refused to supply the generator, citing restrictions and an unwillingness to do further generator business with the Corps.
- Southwest purchased substitute equipment at a higher price and sued Martin for breach of contract; after a bench trial, the court awarded damages measured by the difference between the contract price and cover, plus incidental amounts.
- Martin appealed, disputing contract formation/enforceability under the UCC statute of frauds and challenging the evidentiary support for the trial court’s findings.
Issues
- Whether the parties’ dealings, including the handwritten memorandum, constituted an enforceable contract for the sale of goods under K.S.A. 84-2-201.
- Whether omission or disagreement regarding time and method of payment rendered the alleged contract too indefinite to enforce.
- Whether the trial court’s findings of contract formation and statute-of-frauds compliance were supported by substantial competent evidence.
Decision
- The Kansas Supreme Court affirmed the judgment for Southwest.
- The court held the handwritten memorandum, considered with the circumstances and testimony, satisfied K.S.A. 84-2-201’s statute-of-frauds requirements.
- The court held the lack of agreed payment terms did not defeat contract formation because the UCC supplies a default payment term under K.S.A. 84-2-310.
- The court held the trial court’s finding that the parties intended to and did make a contract at the Springfield meeting was supported by substantial competent evidence and was binding on appeal.
Legal Principles
- Under K.S.A. 84-2-201, an enforceable contract for the sale of goods requires a writing indicating a contract for sale, signed by the party to be charged, and specifying a quantity; the writing need not include all material terms.
- Under K.S.A. 84-1-201(39), “signed” includes any symbol executed or adopted with present intent to authenticate; a party name written on an informal memorandum may satisfy the signature requirement.
- Under K.S.A. 84-2-204(3), a sales contract does not fail for indefiniteness merely because one or more terms are left open if the parties intended to make a contract and there is a reasonably certain basis for a remedy.
- Under K.S.A. 84-2-310, unless otherwise agreed, payment is due at the time and place the buyer is to receive the goods; payment terms may be supplied by the Code when omitted.
- Appellate review defers to trial-court findings supported by substantial competent evidence, even if conflicting evidence exists.
Conclusion
The court enforced an agreement for sale of generator equipment based on an informal handwritten memorandum and surrounding proof, holding that the UCC statute of frauds was satisfied and that missing payment terms did not prevent enforcement because the UCC provides default rules.