Brief Fact Summary. Plaintiff Buffaloe, rented barns from Defendant Hart. Plaintiff attempted to purchase the barns from Defendant by making an installment payment. Defendant returned the payment and sold the barns to others.
Synopsis of Rule of Law. A check is not a sufficient writing to satisfy the statute of frauds if the party against whom enforcement is sought does not sign it.
Plaintiff, a tobacco farmer, rented tobacco and barns from Defendant during the 1988 farming year. The parties did not put the agreement in writing. Plaintiff had purchased equipment from Defendant and their transactions had never been put in writing. Pursuant to the agreement, Defendant was to provide insurance for the barns in 1988. In October of 1988, Plaintiff paid the rent for the barns and tobacco.
Plaintiff then began attempts to purchase the barns from Defendant. Plaintiff offered to pay $20,000 in annual $5,000 installments but did not offer to pay any interest. Defendant accepted the offer. As in their prior dealings, the parties did not put their agreement in writing, but did shake hands. Plaintiff already had possession of the barns under the rental agreement and did not move the barns because Plaintiff had agreed to farm Defendant’s land in 1989 with the rented tobacco.
Plaintiff applied for a loan to pay for the barns in January and indicated to Defendant that he would pay for the barns when the loan came through, but the loan was denied. The parities then reconfirmed that the installments were to be paid by Plaintiff. Plaintiff was unable to obtain insurance coverage for the barns. Defendant agreed to provide insurance for 1989 if Plaintiff reimbursed for the cost, which he did in October of 1989.
Plaintiff presented evidence that he told multiple people of his purchase of the barns, paid for repairs to the barns, and made arrangements to sell the barns. Defendant claims the evidence shows that Plaintiff made a new deal to purchase the barns with the loan, a deal which fell through when Plaintiff was unable to get the loan. Further, Defendant says the $5,000 check was left at Defendant’s home by Plaintiff to entice Defendant to sell the barns for the previous installment agreement.
Plaintiff placed an advertisement for the sale of the barns, and received offers from several people. Defendant asked Plaintiff to “straighten up,” which Plaintiff agreed to in the next few days and indicated that he was selling the barns. Defendant responded that it would “be fine.” Plaintiff wrote a check to Defendant for the monthly installment and indicated on the check that it was in payment for the barns. Defendant offered Plaintiff a receipt, but Plaintiff indicated that the check would operate as the receipt.
The following day, Defendant called Plaintiff to tell him that the barns were already sold and would not be sold to him. Plaintiff received the check submitted in payment back from Defendant, but it was torn. Plaintiff later learned that Defendant sold the barns to the same parties Plaintiff was to sell them to.
Issue. Did the jury err in enforcing the contract?
Held. No. The Court did not err in enforcing the contract.
Because the sale of the barns involves the sale of goods for at least $500, the agreement falls under the statute of frauds provision in the UCC. A check may satisfy the requirements of the statute of frauds if it contains sufficient writing to indicate the contract of sale, is signed by the party against whom enforcement is sought, and indicates quantity. Because Defendant did not sign the check, it does not satisfy the requirements of the statute of frauds.
Plaintiff argues that even though it does not satisfy the statute of frauds, the agreement should be enforced under the doctrine of part performance. The Court determines there is evidence whereby a jury could determine that the agreement is enforceable under part performance. Therefore, the Court upholds the jury verdict.
Discussion. Although the contract did not satisfy the statute of frauds, it was nonetheless enforceable under the doctrine of part performance.