Even if the transaction was subject to the UCC, Plaintiff alternatively argued, the contract was within the UCC “merchant’s exception.” Is the plaintiff correct in its assertions? Discuss.

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Even if the transaction was subject to the UCC, Plaintiff alternatively argued, the contract was within the UCC “merchant’s exception.” Is the plaintiff correct in its assertions? Discuss.

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Defendant, Gray Communications, desired to build a television tower. After a number of negotiation sessions conducted by telephone between the Defendant and Plaintiff, Kline Iron, the parties allegedly reached an oral agreement under which the Plaintiff would build a tower for the Defendant for a total price of $1,485,368. A few days later, Plaintiff sent a written document, referred to as a proposal, for execution by Defendant. The Proposal indicated that it had been prepared for immediate acceptance by Defendant and that prior to formal acceptance by Defendant it could be modified or withdrawn without notice. A few days later, without having executed the Proposal, Defendant advised Plaintiff that a competitor had provided a lower bid for construction of the tower. Defendant requested that Plaintiff explain its higher bid price, which Plaintiff failed to do. Defendant then advised Plaintiff by letter that it would not be retained to construct the tower. Plaintiff then commenced suit alleging breach of an oral contract, asserting that the oral agreement was enforceable because the common law of contracts, not the Uniform Commercial Code (UCC), governed the transaction and that under the common law a writing is not necessary to cover this type of transaction. Even if the transaction was subject to the UCC, Plaintiff alternatively argued, the contract was within the UCC “merchant’s exception.” Is the plaintiff correct in its assertions? Discuss.

Explanation & AnswerSolution by a verified expert

Explanation

The proposal was given to defendant but it was not accepted in writing. Moreover, the defendant refused to sign the contract of sale due to higher price quoted by the defendant.
The service provided by the plaintiff is for the purpose of closing the sale of tower; so, it is not a separate transaction. The acceptance of the proposal should have been in writing, which was not done by the defendant. So, this contract is not enforceable.

Verified Answer

The decision is going tobe in favor the defendant; the claims of plaintiff arewrong. The contract involves a transaction of a huge amount. So, it cannot be executed merely with oral conformation. It should have a proper contract in writing according to the statute of frauds.
The plaintiff asserts that the oral contract is for the services rendered by the plaintiff for the purpose of the sale of goods. Based on the Uniform Commercial Code, the proposal or the letter in writing does not make the contract operative without the action of the defendant.

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