Legal Question in Business Law in California

oral agreement broken day before dilivery

I have a question for you. I run my own company called and I had a customer put an order in for 20 units , I sent him a invoice to sign which I had to resend a few times and I still didn’t get it signed we had a verbal agreement over the phone to prepare him 20 units in 2 weeks with a $10,000 dollar deposit for the prep work, which he paid. I talked to him numerous times on the phone, asking him what color he wanted things of that nature. I called him last Friday letting him know that the units were ready to be picked up, He told me that they will wire transfer the remaining amount of $56,000 on Monday so they can pick it up on Tuesday because they were waiting to buy a fork lift. I said that’s fine. I get a call on Monday telling me that they only want one to test.

My question is that not a breach of a verbal contract? Because the units have been assembled and moved to the pickup location and a day before they come pick them up the back of the deal? Is there anything that can be done?

Thanks for your help.


Asked on 9/28/07, 1:54 pm

2 Answers from Attorneys
Michael Meyer Law Ofc. Of Michael J. Meyer

Re: oral agreement broken day before dilivery

I recommend you google and read UCC 2-201. It has been codified verbatim in the CA Commercial Code section 2201, but the formatting is easier to read in what you find on google for UCC 2-201.

It basically says that an oral agreement is not enforceable, UNLESS the goods are specifically manufactured for the buyer AND are not suitable for sale to others in the ordinary course of the sellers business.

So, make the goods to him as if everything were okay. If he fails to pay for them, don't let him take more than what he paid for, but insist on payment in accordance with your agreement.

If he breaches the agreement, the question to ask is whether the goods are suitable for sale to your other customers. If so, sell them at any reasonable market price and sue him for the difference between that and what he agreed to pay. If the goods are not suitable for sale to other customers, sue him for specific performance of the contract right away.

You should take whatever evidence you have (his PO, etc.) and visit a local attorney before you commit yourself to a position.

Good luck.

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Answered on 9/28/07, 2:13 pm
Terry A. Nelson Nelson & Lawless

Re: oral agreement broken day before dilivery

Anything to be done? Sure. Next time follow proper policies and procedures and insure sufficient deposits are paid before work is done, and that contracts are signed. You weren't warned enough by their refusal to provide written committment?, and by their failure to timely pay required amounts?

This time, deliver any product that has actually been paid for and bring suit for the balance. Since you appear not to know the law and rules, hire an attorney to explain what you are entitled to, and to file suit for you.

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Answered on 9/28/07, 4:02 pm


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