Eastern Dental v. Masel Case Brief

Summary of Eastern Dental v. Masel
U.S. D. Ct. [1980]

Statute of Frauds: Sale of Goods – Requirement Contracts

Relevant Facts: When EDC was formed as a corporation, to distribute and manufacture products exclusively for orthodontics, Masel agreed to supply certain products it manufactured. Over a period of 4.5 years EDC would request, through invoice the products it needed and Masel would supply them. After an attempt to purchase EDC failed Masel informed EDC that it would no longer supply products to them. EDC maintained that the last year’s worth of products were defective. They had operated w/o a written agreement, doing business solely through invoices and statement.

Legal Issue(s): Whether a contract can be evidenced by a writing such as invoices and letters to satisfy the S/F, for the sale of goods over $500?

Court’s Holding: Yes, but not here.

Procedure: EDC filed complaint in U.S. D. Ct and Df filed partial summary judgment. Summary granted.

Law or Rule(s): A writing satisfies the statute if 1) it is signed by the party to be charged; 2) evidences a contract for the sale of goods; and 3) specifies a quantity term. Quantity term need not be numerically stated in a requirement K, there must be some writing to indicate the quantity to be delivered under the K requirements.

Court Rationale: The letter and the invoices may indicate that the parties had an ongoing business relationship, they do not, expressly or by implication, reflect that the contract between the parties was for the supply of EDC’s requirements of Masel’s products. 1st, the invoices reflecct only the quantity of goods shipped, not that a requirement contract for a quantity existed. The letter fails b/c the subject matter it involves is dental pliers, not disposable orthodontic products which is what is claimed the requirement contract was for. Masel was not obligated to market his products solely through EDC. There is nothing in the termination letter to suggest the account between the parties was a requirement K. There are no writings to satisfy the requirement to state a quantity term under the S/F.

Plaintiff’s Argument: The original letter of negotiation and the invoices are sufficient as writing to memorialize a requirements contract.

Defendant’s Argument: The S/F demands that all contracts for the sale of goods involving $500 or more, including requirements K, be reduced to writing.

Copyright © 2001-2012 4LawSchool.com. All rights reserved. Privacy Policy HotChalk Partner