The opinion of the court was delivered by: Bauer, District Judge.
MEMORANDUM OPINION AND ORDER
This cause comes before the Court on defendant's motion for a
judgment on the pleadings.
This is an action seeking to redress the alleged breach of
contract by the defendant, Archer Bearing Company ("Archer"), in
that the defendant failed to deliver to the plaintiff, Automotive
Spares Corp. ("Automotive"), certain bearings. The plaintiff
seeks the following damages: (1) in the amount of $32,741.50 for
loss from the resale of certain of the said materials; (2) in the
amount of $31,734.04 for the price differential of other such
material on the open market at the price usually and customarily
charged therefor; and (3) the potential damages in turn sustained
by the plaintiff by reason of its breach of the said contract to
sell certain of the contracted for materials to various
Defendant, in support of its motion argues that this action is
based on an oral contract and is thus barred by the Statute of
Frauds. Plaintiff contends that the action is not barred because
of an invoice sent by Archer to Automotive. Archer claims that
such an invoice is insufficient to indicate a contract between
the parties because it bears no signature. In support of its
position Archer cites Johnston Manufacturing Co. v. Hamilton
Glass Co., 261 Ill. App. 308, which was decided in 1931 before the
advent of the Uniform Commercial Code (UCC).
The UCC has made many significant changes in commercial law in
an attempt to codify and simplify the legal relationship between
parties such as the merchants involved in this case. Section
2-201 of the code provides:
"(1) Except as otherwise provided in this Section a
contract for the sale of goods for the price of $500
or more is not enforceable by way of action or
defense unless there is some writing sufficient to
indicate that a contract for sale has been made
between the parties and signed by the party against
whom enforcement is sought or by his authorized agent
or broker. A writing is not insufficient because it
omits or incorrectly states a term agreed upon but
the contract is not enforceable under this paragraph
beyond the quantity of goods shown in such writing.
(2) Between merchants if within a reasonable time a
writing in confirmation of the contract and
sufficient against the sender is received and the
party receiving it has reason to know its contents,
it satisfies the requirements of subsection (1)
against such party unless written notice of objection
to its contents is given within 10 days after it is
In this case Archer sent Automotive a document which appears to
be an invoice or statement No. 78812 on a form containing a
letterhead and identification markings of the defendant. This
document seems to demonstrate to whom the merchandise was sold,
the date of the sale, the quantities and description of the items
and the price.
A reading of the Code Comments indicates that the normal use of
Section 2-201(2) is to bind the recipient of the confirmation
letter and not the sender. However, reading Sections 2-201(2) and
2-207(3) indicates an intention of the Code authors to not allow
the Statute of Frauds to act as a bar in situations wherein
merchants by their conduct and normal course of dealings enter
contracts which may be verbal at the outset.
The net effect, however, is simply to take away from the
merchant who fails to object within 10 days the threshold defense
of the Statute of Frauds. The burden of persuading the trier of
fact that a contract was in fact made still rests upon the
plaintiff. See Uniform Commercial Code Comment S.H.A.
Ill.Rev.Stat., Chap. 26 § 2-201 p. 114. Even though Section 2-201
does not deal directly with the situation presented here, it is
nevertheless clear that the document in question could suffice as
a writing in confirmation.
What is even more important is that the facts in this case show
the invoice was sent by Archer. Now Archer claims that they are
not bound by it because it was not signed. Section 2-201 requires
that the writing indicating a contract must be signed by the
party against whom enforcement is sought. Reference to the
comments indicates the following definition of "signed":
"39. Signed. New. The inclusion of authentication in
the definition of `signed' is to make clear that as
the term is used in this Act a complete signature is
not necessary. Authentication may be printed, stamped
or written; it may be by initials or by thumbprint.
It may be on any part of the document and in
appropriate cases may be found in a billhead or
letterhead. No catalog of possible authentications
can be complete and the court must use common sense
and commercial experience in passing upon these
matters. The question always is whether the symbol
was executed or adopted by the party with present
intention to authenticate the writing."
This Court recognizes the need to use common sense and
commercial experience in regards to this signature question.
Often times merchants exchange documents which control the
transaction that do not bear their signature. The facts show that
Archer sent the document bearing its letterhead containing the
essential terms. This conduct is more convincing than the fact
that the document does not contain a formal signature. An invoice
containing a letterhead, quantity designations, and price terms
has been heretofore found sufficient under the UCC. See
Associated Hardware Supply Co. v. Big Wheel Distributing Company,
355 F.2d 114 (3rd Cir. 1966).
This Court's decision should not be construed as a finding that
a contract did exist between plaintiff and defendant. The burden
of persuading the trier of fact that an oral contract was made
prior to sending the document which acted as a ...