Lige Dickson Co. v. Union Oil Co.

Supreme Court of Washington · 1981 · Contracts

Contractsstatute of fraudsU.C.C. 2-201sale of goodspromissory estoppeloral contractuniformitycourse of dealing

Facts

Lige Dickson Company had a long-standing business relationship with Union Oil and bought liquid asphalt from it without any written contract. In 1971, after price increases, Union Oil orally promised price protection for asphalt needed to perform plaintiff's existing fixed-price paving contracts, and its representatives later continued to confirm protected tonnage for those contracts. In late 1973, Union Oil notified plaintiff of price increases applicable to purchases after December 31, 1973, which was plaintiff's first notice that Union Oil was abandoning the oral price-protection arrangement. Plaintiff alleged increased out-of-pocket costs in obtaining asphalt to complete existing contracts.

Issue

May an oral promise otherwise within RCW 62A.2-201, the U.C.C. statute of frauds governing sales of goods, nevertheless be enforced on a theory of promissory estoppel under Washington law?

Rule

In Washington, promissory estoppel cannot be used to overcome the statute of frauds contained in RCW 62A.2-201 in a case involving the sale of goods. The U.C.C.'s own specified exceptions govern enforceability, and courts should not enlarge those exceptions by adopting Restatement (Second) of Contracts § 217A in this context.

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

In Spokane, Cedar Valley Grocers orally agreed to buy $40,000 worth of canned fruit from North Basin Foods over the next six months at a fixed price. Relying on the promise, Cedar Valley signed resale commitments with local restaurants, but the parties never exchanged any signed writing and no statutory exception applies.

If Cedar Valley sues in Washington to enforce the oral supply agreement solely on a promissory estoppel theory, what is the most likely result?

Explanation. Washington's majority rule is that for contracts involving the sale of goods, promissory estoppel may not be used to defeat RCW 62A.2-201 when the oral agreement is otherwise within the statute of frauds and no statutory exception in that section applies. The court refused to adopt Restatement § 217A in U.C.C. sales cases because doing so would enlarge the legislature's chosen exceptions and undermine uniformity. (Derived from Lige Dickson Co. v. Union Oil Co. (n.d.).)