XCBOB, INC. v. ED TUCKER DISTRIB., 2016 PA. DIST. & CNTY. DEC. LEXIS 14205 COMMON PLEAS COURT…

XCBOB, INC. v. ED TUCKER DISTRIB., 2016 PA. DIST. & CNTY. DEC. LEXIS 14205 COMMON PLEAS COURT OF SNYDER COUNTY, PENNSYLVANIA AUGUST 8, 2016, FILED NO. CV-390-2015 REPORTER 2016 PA. DIST. & CNTY. DEC. LEXIS 14205 XCBob, Inc. is an online motorcycle and ATV parts business from the owners home. XCBob entered into oral agreements with the defendant, Ed Tucker Distributers, for purchases of various materials to sell in the online business. In the course of nearly seven years from 2008 to 2015, XCBob purchased $1.72 million dollars worth of equipment. The defendant had expressed concern
XCBOB, INC. v. ED TUCKER DISTRIB., 2016 PA. DIST. & CNTY. DEC. LEXIS 14205 COMMON PLEAS COURT OF SNYDER COUNTY, PENNSYLVANIA AUGUST 8, 2016, FILED NO. CV-390-2015 REPORTER 2016 PA. DIST. & CNTY. DEC. LEXIS 14205 XCBob, Inc. is an online motorcycle and ATV parts business from the owners home. XCBob entered into oral agreements with the defendant, Ed Tucker Distributers, for purchases of various materials to sell in the online business. In the course of nearly seven years from 2008 to 2015, XCBob purchased $1.72 million dollars worth of equipment. The defendant had expressed concern from the beginning of the relationship that the plaintiff had no brick-and-mortar shop. Finally, in 2015 defendant terminated the contract. Plaintiff raises: (a) A breach of contract claim alleging an oral contract that required mutual consent to terminate; (b) A detrimental Reliance/Promissory Estoppel claim, alleging Plaintiff relied on Defendants promise to supply the products and Plaintiff suffered a loss as result. Plaintiff demands judgment in an amount in excess of $50,000.00. The defendant Ed Tucker Distributors moved for a summary judgment and a dismissal of plaintiffs case. The facts are clear that the oral agreement was indeed verified by subsequent emails and documentation and the determination of whether these subsequent documents satisfied the statute of frauds remains a question of fact for a jury. However, the fact that no evidence appears indicating a time period of the contracts duration is problematic. It is not enough to state that the contract will be terminated upon the mutual agreement of the parties. The court held: The Court must agree that any contract that may have existed between the parties did not express its duration and was therefore terminable by either party at any time. The Court grants the motion for summary judgment in favor of Defendant on this basis. Plaintiff alleges Defendants breach was that act of its termination of the contract. Absent a specific term, the parties alleged contract was terminable at will of either party. Plaintiffs claim for breach of contract is dismissed. Plaintiffs second claim rests on promissory estoppel. It is clear that if a contract exists, then equitable remedies such as estoppel theories will not lie. But here, that first hurdle is satisfied as the court finds no UCC article 2 contract. But, as to the estoppel claim, the court lays out the requirements for promissory estoppel: To maintain a promissory estoppel action a claimant must aver the following elements: (1) the promisor made a promise that [it] should have reasonably expected would induce action or forbearance on the part of the promise; (2) the promisee actually took action or refrained from taking action in reliance on the promise; and (3) injustice can be avoided only by enforcing the promise. [citations omitted] To this end the court find that while promissory estoppel could be applicable, plaintiff had not proven these requirements. In the Complaint, Plaintiff fails to claim that the Defendant should have reasonably expected the promise would induce action or forbearance on the part of Plaintiff. Plaintiff does not claim Defendant required the Plaintiff to stop using his other suppliers or even that the Defendant become the Plaintiffs principal supplier. Plaintiff does not claim that he cannot use other suppliers, and even concedes that now, it relies on other suppliers. Plaintiff has not pleaded an unavoidable injustice because of his necessity to use other suppliers. CRITICAL THINKING This case lays out several issues for consideration. The purported contract provided no definite time frame. It is terminable at the mutual agreement of the parties. The court rules that this is a fatal defect in contract formation and subsequent performance. Can you explain the courts rationale on this point? ETHICAL DECISION MAKING With the court finding that there is no contract under the UCC since there is no definite time certain in the agreement, the court opens the door for an application of promissory estoppel since the first requirement for an equitable remedy is that no contract exists and thus no remedy exists under contract law. But, just as quickly as the court opens that door, it closes it. Explain why.