Cloud Corp. v. Hasbro

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Cloud Corp. v. Hasbro
Court United States Court of Appeals for the Seventh Circuit
Citation
Date decided 2002-12-26

Facts

Cloud Corporation ("Cloud") & Hasbro Incorporated engage in casual communications in the form of e-mail.

Hasbro, a toymaker, engaged with "Cloud" to produce powder packets for aquariums.

Hasbro would transmit purchase orders to Cloud via e-mail; Cloud would reply to confirm the order.

Over time, the popularity of the toy aquariums waned; Hasbro sent Cloud an 8.4 million order packet.

After several intermediate occurrences, Hasbro refused to accept a Cloud delivery for 9.5 million powder packets.

Procedural History

Cloud sued for breach of contract; Hasbro wins in the trial court.

Cloud appealed to the 7th Circuit.

Issues

Can informal e-mails create a contract modification that satisfies UCC's statute of frauds?

Holding

Yes. A modification to a contract via e-mail bearing the sender's name can satisfy the UCC's statute of frauds.

Rule

The Uniform Commercial Code (UCC)'s statute of frauds requires sales of goods over $500 (last figure based on inflation) to be signed.

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