ISENBERGH v. S. CHI. NISSAN APPELLATE COURT OF ILLINOIS, FIRST DISTRICT, SIXTH DIVISION SEPTEMBER…

ISENBERGH v. S. CHI. NISSAN APPELLATE COURT OF ILLINOIS, FIRST DISTRICT, SIXTH DIVISION SEPTEMBER 16, 2016, DECIDED NO. 1-15-3510 REPORTER 2016 IL APP (1ST) 153510-U; 2016 ILL. APP. UNPUB. LEXIS 1947; 90 U.C.C. REP. SERV. 2D (CALLAGHAN) 1009 Summary: Plaintiff visited South Chicago on January 10, 2008, seeking a new 2008 Nissan Versa (Versa) with manual transmission, anti-lock brakes, and other features. He was told by the employees of South Chicago that a Versa with those features was not in stock, but could be ordered, and would be delivered within 60 days. Because plaintiff would need a
ISENBERGH v. S. CHI. NISSAN APPELLATE COURT OF ILLINOIS, FIRST DISTRICT, SIXTH DIVISION SEPTEMBER 16, 2016, DECIDED NO. 1-15-3510 REPORTER 2016 IL APP (1ST) 153510-U; 2016 ILL. APP. UNPUB. LEXIS 1947; 90 U.C.C. REP. SERV. 2D (CALLAGHAN) 1009 Summary: Plaintiff visited South Chicago on January 10, 2008, seeking a new 2008 Nissan Versa (Versa) with manual transmission, anti-lock brakes, and other features. He was told by the employees of South Chicago that a Versa with those features was not in stock, but could be ordered, and would be delivered within 60 days. Because plaintiff would need a car during the 60-day period before delivery of the Versa, he inquired whether he could rent or purchase a used car for $4,000 to $5,000 from South Chicago. South Chicago offered, instead, to sell him a new automobile under a retail installment contract for monthly payments of $550 (referred to in the complaint as the temporary car), and then to buy back the temporary car from plaintiff when the Versa was delivered. South Chicago allegedly promised that it would buy back the temporary car at a formula price which would limit plaintiffs costs in purchasing the temporary car to no more than the total of two monthly payments under the retail installment contract. On that date, plaintiff signed a retail installment contract showing the price of the temporary car as $26,141, the amount financed as $28,115.19, and the monthly charges as $552.26. The retail installment contract was later assigned to defendant and counterplantiff, AmeriCredit Corporation (AmeriCredit). On May 24, 2008, plaintiff returned to South Chicago for delivery of the Versa. At that time, South Chicago denied that it had agreed to buy back the temporary car from plaintiff at a price that would limit plaintiffs costs for the purchase of the temporary car to the amount of two months payments under the retail installment contract. After South Chicago denied the existence of the buyback agreement, plaintiff asserted that he would bring a legal action against it. Decision: Plaintiff does not dispute that the temporary car satisfies the definition of goods under the UCC. Plaintiff does contest that the return agreement was a transaction for the sale of goods. Section 2-106(1) of the UCC defines contract for sale as including both a present sale of goods and a contract to [**11] sell goods at a future time. 810 ILCS 5/2-106(1) (West 2010). A sale consists in the passing of title from the seller to the buyer for a price. Id. A [b]uyer means a person who buys or contracts to buy goods, (810 ILCS 5/2- 103(1)(a) (West 2010)), while a [s]eller means a person who sells or contracts to sell goods. (810 ILCS 5/2-103(1) (d) (West 2010)). The UCC defines goods as all things, including specially manufactured goods, which are movable at the time of identification to the contract for sale. 810 ILCS 5/2-105(1) (West 2010). A purchase is defined as taking by sale, lease, discount, negotiation, mortgage, pledge, lien, security interest, issue or reissue, gift, or any other voluntary transaction creating an interest in property. 810 ILCS 5/1-201(b)(32) (West 2008). Plaintiff alleged in his complaint that, in return for his agreement to order the Versa, South Chicago had orally agreed to purchase back the temporary car at a price which would result in the costs of his purchase of the temporary car equaling the amount of two payments under the retail installment contract The sales price of the temporary car was over $26,000 and two payments under the retail installment contract totaled over $1,100. As a result, the price involved for the buy back of the temporary car was over the limit of $500 found in the Statute of Frauds. Therefore, as alleged in the complaint, the return agreement provided that South Chicago, as buyer or purchaser, agreed to purchase the temporary car (the goods) from plaintiff (the seller), at the time the Versa was delivered for a price, which would result in plaintiffs costs for his purchase of the temporary car to be equal to two payments under the retail installment agreement. That amount was clearly over $500, and the return agreement was, therefore, one for the sale of goods and was subject to the Statute of Frauds contained in section 2-102 of the UCC. CRITICAL THINKING Can you clearly articulate from this case the requirements for a sale of goods? How is a sale defined and how is a good defined? ETHICAL DECISION MAKING In Chapter 2, you learned about the WPH framework for business ethics, which asks you to consider three questions: Whom would this decision affect? What is the purpose of the business decision? How should managers make decisions? When you are thinking about the purpose of a decision, it is helpful to consider values. Can you explain the purpose behind the courts decision in the Isenbergh case? How does this decision enhance the basic goal of the UCC, that is, facilitating commercial transactions?