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BLTC-9e Case Problem with Sample Answer
Chapter 14: The Statute of Fraud—Writing
Requirement
14–5 Case Problem with Sample Answer
Milton Blankenship agreed in writing to buy 15 acres of Ella Mae Henry’s
junkyard property for $15,000 per acre with a ten-year option to buy the
remaining 28.32 acres. Blankenship orally agreed to (1) begin operating a car
skeleton processing plant within six to fifteen months; (2) buy as many car
skeletons generated by the yard as Clifford Henry wanted to sell him, at a certain
premium over the market price; and (3) allow all junk vehicles on the property to
remain until they were processed at the new plant. Blankenship never operated
such a plant, never bought any vehicles from the yard, and demanded that all
vehicles be removed from the property. To obtain the remaining 28.32 acres,
Blankenship fi led a suit in a Georgia state court against Henry, who responded
with a counterclaim for breach of contract. Under oath during discovery, Henry
testified that their oral agreement allowed him to sell “as many of the car
skeletons generated by the Henry junkyard” as he wished, and Blankenship
testifi ed that he had agreed to buy as many skeletons as Henry was willing to
sell. Does the Statute of Frauds undercut or support Henry’s counterclaim?
Explain. [Henry v. Blankenship, 284 Ga.App. 578, 644 S.E.2d 419 (2007)]
Sample Answer:
The court issued a summary judgment in Blankenship’s favor. On Henry’s appeal, a state intermediate appellate court reversed this judgment and remanded
the case for trial. The appellate court ruled first that the contract Henry now
seeks to enforce was one for the sale of car skeletons or other scrap”—in other
words, “one for the sale of goods to which the UCC [Statute of Frauds] applies.”
That provision requires written evidence of a contract for a sale of goods priced
at $500 or more, and the writing must at least state the quantity term and be
signed by the party to be charged. If the party against whom enforcement is
sought admits in pleadings, testimony, or otherwise in court that a contract was
made, the contract is enforceable even absent a writing. Here, of course, the
parties did not put their agreement concerning the skeletons in writing. But, just
as Henry testified that he could sell “as many of the car skeletons generated by
the Henry junkyard” as he wished, Blankenship testified that he agreed to buy as
many skeletons as Henry was willing to sell. Thus, the court concluded,
“Blankenship admitted the existence of an output contract for the purchase and
sale of as many car skeletons as Henry wished to provide from the junkyard. As
such, the contract specified a quantity of goods, and was enforceable under” the
Statute of Frauds.