Question

FACTS: Kendall Gardner agreed to buy a specially built shaving mill from B&C Shavings. He planned to use the mill to produce wood shavings for poultry processors. B&C faxed an invoice to Gardner reflecting a purchase price of $86,200, with a 30 percent down payment and the “balance due before shipment.” Gardner paid the down payment. B&C finished the mill and wrote Gardner a letter telling him to “pay the balance due or you will lose the down payment.” By then, Gardner had lost his customers for the wood shavings, could not pay the balance due, and asked for the return of his down payment

ISSUE: Did these parties have an enforceable contract under the Statute of Frauds? Explain. [Bowen v. Gardner, 2013 Ark.App. 52, 425 S.W.3d 875 (2013)] (See the Formation of Sales and Lease Contracts.)

DECISION: Two to three sentences answering above questions.

LEGAL REASONS [2-3 paragraphs in detail supporting your DECISION.

Answer 1

The parties do not have an enforceable contract as the material terms were omitted from the contract and the court has held this as a violation of the statute of fraud.

The court stated that a contract must have essential terms as to the situation in case where sales cannot be made or completed.

Because there exists no contract, the B&C is not entitled to have recovered the amount that has been paid as the down payment and this must now be returned.

The court decision was that the down payment has to be returned , however some amount from the downpayement can be deducted as to make the machine fit for sale in the open market. The court has ordered that the machine should be sold in the open market and necessary incidental charges related with the sale of machine can be deducted.