How does the concept of detrimental reliance

Assignment Help Business Law and Ethics

Reference no: EM133843962

Assignment:

Distribu-Dor, Inc. v. George Karadanis, 11 Cal. App. 3d 463 (3rd Dist. 1952)

fact:

Plaintiff, Distribu-Dor, Inc., negotiated with defendant, George Karadanis, to supply mirrors and tub and shower enclosures for the Tahoe Inn, which was under construction by the defendant. Plaintiff's representative handed a price quotation paper to Karadanis, who took it, crossed out and replaced some figures, and handed it back to plaintiff's representative. Karadanis then stated, "If you can live with this, we have an order." Plaintiff's representative then signed the revised quotation list and handed it back to Karadanis for his signature. Karadanis then stated, "I'm not going to sign this, my word is my bond."

Plaintiff's representative made two later trips to the Tahoe Inn, at which time he measured for the wall mirrors. On both occasions, he saw Karadanis. The mirrors were ordered on December 29. Plaintiff's representative visited the job a month or so later, and discovered potential problems with the order. After two unfruitful meetings, Karadanis decided todo business with another firm.

Plaintiff sued defendant for breach of contract. Finding no written contract (among other grounds)the trial court ruled that the statute of frauds prevented recovery by the plaintiff and the court entered judgment for the defendant. The plaintiff then filed this appeal.

DECISION: REGAN, JUSTICE

Commercial Code section 2201 requires a written contract for sale of goods in an amount over $500 unless the goods are to be specially manufactured for the buyer; are not suitable for resale in the ordinary course of the seller's business; and the seller has already started the manufacture or has attempted to procure the goods.

Plaintiff's representative testified that the mirrors were of an unusual size and were not readily resaleable; that many of them had to be recut and edged at great expense and loss. The court could properly find the mirrors fit within subdivision (3)(a), section 2201 of the Commercial Code. Since the tub and shower enclosures, although normally saleable, were included in the same contract sought to be enforced, the portion of the contract also falls without the statute of frauds.

The language of the subdivision clearly shows that such behavior on the part of the seller is considered to be evidence of a bona fide business transaction. Therefore, there is no justification inholding one portion of the contract enforceable and one not.

Strict adherence to the statue of frauds has been abandoned in favor of certain limited exceptions to promote equity and fair dealing between parties. Plaintiff had a valid contract for sale of the mirrors. [The contract included the tub and shower enclosures because the court found that they were part of the same contract even though they were not specially manufactured goods.] Accordingly, the judgment appealed from is reversed.

1. Why should specially manufactured goods be an exception to the statute of frauds?

2. How does the concept of detrimental reliance help justify the exception of specially manufactured goods from the statute of frauds?

Reference no: EM133843962

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