Notes - Channel Master Corp. v. Aluminum Ltd. Sales | Kessler, Gilmore & Kronman | August 28, 2012


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by Kessler, Gilmore & Kronman



1. Llewellyn criticizes both the majority and the dissent in the Channel Master case with uncharacteristic vehemence:


The court finds allegations of fact and reliance sufficient to make a case in fraud, finds the cause to be entirely independent of contractual relations, and finds the statute of frauds to be inapposite in law and, on the basis of an inconclusive passage from Prosser, in policy. The three-judge dissent this time accepts, seemingly, each of these doctrinal premises; it attacks solely the application: the representations were not of facts susceptible of knowledge. For such a court, on such an issue, this is truly extraordinary. The situation is one in which the torts theorists (Restatement, Harper and James, Prosser, all gathered and cited) have launched as unconsidered a jamboree as ever has been suggested in the books: in the instant "application" of the idea, word-of-mouth negotiations for a contract which have led to no acceptance, which need not have led even to an offer, and which would in an action on an actually completed contract be incapable of submission to the jury for lack of a signed writing these become admissible in the teeth of the statute against frauds and perjuries, admissible, moreover, in such fashion as to allow damages of a range and extent which would be dubious of procurement in any action based on an agreement fully closed, formally authenticated, and unambiguously relied on. All of this by virtue of merely adjusting the pleadings and the evidence to run down an alley which is rather easier to travel with persuasiveness than is the alley of contract-closing and one in which any perjury or mistake is harder to pinpoint for pillory. For these are not the type of "conversations" which (like a true·blue offer or acceptance for a five-year deal) are hard to believe in unless "confirmed" in writing on the same day; instead, they run loose, without confirmation, or exactness, or top limit, or any other check-up. And these adventures into space are undertaken on the policy say-so not of thoughtful commercial scholars who are for instance somewhat bothered about a bit of untoward tightness and overtechnicality in the contract rules of damages, or about an unwise and unbusinesslike precisionism in requiring a mere "note or memorandum" under the Statute of Frauds to recite accurately every agreed term. No, these adventures are undertaken instead on somewhat loose general language about misrepresentation put out by scholars whose delight is to see the law of torts inherit the earth. Extraordinary indeed; and happily most uncharacteristic.


Llewellyn, The Common Law Tradition 473 (l960).


Hill, Damages for Innocent Misrepresentation, 73 Colum. L. Rev. 679, 715 (l973), defends the Channel Master court's treatment of the Statute of Frauds and points out that "[t]he issue is one on which the courts are divided."


2. Suppose that after lengthy bickering about the sale of a generator, the parties have come to an agreement as to its price.  But the terms of payment have not been agreed upon.  The seller wants 10 percent of the purchase price, 50 percent on delivery, and the balance on acceptance.  The buyer in response tells the seller that he generally pays 9 percent on the tenth of the month following delivery and the balance on final acceptance.  The seller, who claims that he does not recall the buyer’s response, fails to deliver.  Is this a situation covered by U.C.C. §2-204(3), dealing with “open terms”?  If this is the case, would §§2-305, 3-310 apply?  The hypothetical was suggested by Southwest Engineering Co. v. Martin Tractor Co., 205 Kan. 684, 473 P.2d 18 (1970), applying §§2-204(3) and 3-310(a).  Does that situation involve an assent, or a failure to agree?  See further C & J Fertilizer, Inc. v. Allied Mutual Insurance Co., 227 N.W.2d 169, 172, 176 (Iowa 1975).


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June 02, 2014 Notes - Channel Master Corp. v. Aluminum Ltd. Sales Notes - Channel Master Corp. v. Aluminum Ltd. Sales

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