DF Activities Corp. v. Brown

United States Court of Appeals for the Seventh Circuit · 1988 · Contracts

851 F.2d 920 (7th Cir. 1988)

Updated July 31, 2026

contractsstatute of fraudsUCC § 2-201sale of goodsjudicial admissionsummary judgment analogyaffidavit denialdiscovery limits

Facts

DF alleged that Brown orally agreed in a November 26 phone conversation to sell the Willits Chair for $60,000, payable in two installments. Briggs, DF's art director, sent Brown a December 3 letter confirming the agreement and a $30,000 check. Brown returned both with a handwritten note stating she had made other arrangements and the chair was no longer available, and she later sold the chair for $198,000. In support of dismissal, Brown submitted an affidavit swearing that she had never agreed to sell the chair to DF or Briggs and denying recollection of the November 26 conversation.

Issue

When a contract for the sale of goods is otherwise barred by UCC § 2-201, may the plaintiff continue discovery in hopes of obtaining a judicial admission under § 2-201(3)(b) after the defendant has already denied under oath in an affidavit that any contract was made?

Rule

A plaintiff seeking to enforce an oral contract within UCC § 2-201 may not avoid dismissal by arguing that discovery might later produce a judicial admission under § 2-201(3)(b) once the defendant has denied under oath in an affidavit that any contract was made. After such a sworn denial, the judicial-admission safety valve is closed, because remote possibilities of a later admission do not justify prolonging litigation that is almost certain to be futile.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

In Milwaukee, Nora Patel sued Evan Mercer for breach of an alleged oral agreement to sell a rare industrial 3D printer for $40,000. Evan moved to dismiss under UCC § 2-201 and filed a notarized affidavit swearing that he never agreed to sell the machine to Nora; Nora asks the court to allow depositions because Evan might later admit the deal.

How should the court rule?

Explanation. The majority rule is that when an oral goods contract is otherwise barred by UCC § 2-201 and the defendant has denied under oath in an affidavit that any contract was made, the plaintiff may not avoid dismissal by speculating that discovery might later produce a judicial admission under § 2-201(3)(b). The court viewed that possibility as too remote to justify prolonging litigation.