Janet Durham orally agreed to purchase certain computer hardware priced at $10,000 from Ted Stallings. The sale of the hardware also included a one-time setup service visit priced at $100. The total contract price amounted to $10,100. The computer
hardware was delivered and set up, and Durham paid $10,100. Afterwards, Durham discovered that she could obtain the same goods and services from another seller for a total contract price of $9,100. She now seeks rescission of the contract, based on the fact that more than $500 in goods were involved in the sales transaction, that the contract between her and Stallings was subject to the statute of frauds as a result, and that the oral agreement between them was therefore unenforceable. Durham wants to return the computer hardware to Stallings, and receive reimbursement of $10,000 (She is willing to waive her claim to reimbursement for the $100 setup service visit.) Evaluate Durham's legal position in this matter.
A contract for services is not governed by the UCC, but when services are not the predominant part of a sale of goods contract, the contract will be classified as within the control of the UCC. Because the predominant component of this contract involved the sale of hardware (goods), the UCC applies.
As a general rule, whenever the sales price of goods is $5,000 or more, the sales contract must be in writing to be enforceable. An exception to the statute of frauds writing requirement exists, however, when the goods have been delivered by the seller and received and accepted by the buyer. The sales contract between Durham and Stallings is within this exception to the statute of frauds. Another exception to the statute of frauds writing requirement is if the buyer has made full payment. Since Janet has already tendered full payment, she cannot successfully argue for rescission of the contract based on a violation of the statute of frauds writing requirement. Perhaps Janet has made a bad bargain in this case, but bad bargains are enforceable nonetheless.?
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