Gross Valentino Printing Co. v. Clarke

Illinois Appellate Court · Contracts

ContractsUCCContract modificationFraudEconomic duressprinted magazinesgoods vs servicesUCC Article 2

Facts

The parties agreed in July 1979 that plaintiff would print defendant's magazine for $6,695. After an August 8 meeting about layout, plaintiff later informed defendant that the job would cost more because some work had to be sent out, and plaintiff sent an August 15 letter raising the price to $9,300 for the same work. Defendant signed a purchase order reflecting the new price when the first 5,000 magazines were delivered, paid $4,650 on account, received the full shipment of 15,000 magazines, and only later notified plaintiff that he would not accept the price increase. Defendant asserted lack of consideration, fraud or innocent misrepresentation, and business compulsion as defenses.

Issue

Whether the parties' contract for printing magazines was a contract for goods governed by the UCC so that the price modification required no consideration, and whether defendant sufficiently alleged fraud or business compulsion to defeat summary judgment. Also at issue was whether the trial court properly entered summary judgment for plaintiff on those affirmative defenses.

Rule

Under UCC Article 2, a modification of an existing contract needs no consideration to be binding if the underlying transaction is for goods. Printed magazines are goods when the primary subject of the contract is the tangible, movable final product and any services are merely incidental. Fraud requires a specific allegation of a false statement of material fact, known false by the speaker, intended to induce action, justifiably relied on, and causing damage; statements about future events are not enough. Economic duress or business compulsion requires a wrongful act that deprives a party of free will, and the party must show that legal redress would be inadequate.

🔒

See the holding & full analysis

Create a free KwikCourt account to unlock the rest of this brief — and practice the case.

The court's holding and reasoning
Doctrine tests, pitfalls & exam hypotheticals
10 practice questions + 4 AI-graded essays on this case

Free sample · practice this case

Test yourself

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

Lena Ortiz, who runs a neighborhood theater company in Milwaukee, contracts with Badger Run Printworks to produce 25,000 standard playbills for a fixed price. The printer also helps arrange the text and images on the page, but Lena chose the printer mainly because it offered the lowest bid and she viewed the formatting work as interchangeable among local printers.

If a dispute later arises over a price modification, which characterization of the contract is most likely correct?

Explanation. The majority opinion applies a predominance test focused on the primary subject of the agreement. Where the buyer principally seeks the tangible, movable printed product and any layout or printing work is merely incidental, the contract is for goods under Article 2. The fact that the buyer shopped by price and regarded the printer's work as fungible supports that conclusion.