Mel had an oral contract with Tool and Die Company. Tool and Die was to design a
ID: 426435 • Letter: M
Question
Mel had an oral contract with Tool and Die Company. Tool and Die was to design and specially manufacture a part for one of Mel's machines. The agreed-on price was $2,000. When the part was completed, Mel refused to take delivery or pay for the part. Tool and Die has no other customers for a unique part like this. Tool and Die filed suit against Mel for breach of contract. Mel claims that the contract is unenforceable under the statue of frauds and that he has no liability. Which party will win this dispute?
a.Mel wins because the sale is under common law.
b.Mel wins because the parol evidence rule does not allow evidence of oral contracts to be admitted into court.
c. Tool and Die wins because specially manufactured goods are an exception to the Code's writing requirement.
d. Tool and Die wins because Mel's order is fraudulent misrepresentation under the common law.
Explanation / Answer
Answer: (C) Tool and Die wins because specially manufactured goods are an exception to the Code's writing requirement.
Explanation: As per the Uniform Commercial Code (UCC), under the statute of frauds, the contract between Mel and Tool and Die Company will be enforceable as the part was designed and manufactured specifically for Mel’s machines. This customized part is not suitable for sale to other customers in the ordinary course of Tool and Die’s business. Therefore, Tool and Die will win the dispute.