Also known as: specially manufactured goods · custom goods · specially made goods
Written by attorneys — see sources below.
Goods produced according to a buyer's unique specifications. Such goods qualify as movable items under sales law even before they exist and trigger an exception to the statute of frauds when the seller has made a substantial beginning of manufacture or procurement commitments before receiving notice of repudiation.
Sapphire Technologies agrees to fabricate ten unique brackets for Scott Summers according to his precise engineering drawings. The brackets do not yet exist when the parties reach their oral deal. Because the items will be movable once identified to the contract, they qualify as goods even though they remain future goods at formation.
Sterling Dynamics begins cutting and welding specialized pipe fittings for Samuel Soto after an oral order exceeding five hundred dollars. The fittings match only Soto's specifications and cannot be sold to other customers. Sterling's substantial start on manufacture before any repudiation allows enforcement of the oral contract despite the missing signed writing.
Sometime prior to September 13, 1977, Ivey’s Plumbing & Electric Company, Inc., a Mississippi corporation with offices in Kosciusko, became interested in bidding as a subcontractor for the mechanical portion of a construction project at the Naval Construction Battalion Facility in Gulfport, Mississippi. To prepare its bid, Ivey’s sought quotations for five air compressors specified in the project plans. On September 13, 1977, Petrochem Maintenance, Inc., a Louisiana supplier, provided an oral quotation of $89,073.62, which was the lowest, and Ivey’s used it in its successful bid to the prime contractor that same day. Petrochem had obtained its quotation the previous day from Gardner-Denver Company, a Delaware manufacturer, through agent Robert Theriot, who provided an estimate sheet for two compressors and indicated the price for three more. Shortly after the bid acceptance, Petrochem learned that competitors were quoting much higher prices around $144,000. Gardner-Denver then issued a revised quotation of approximately $113,000 on September 26, 1977. Petrochem issued a purchase order on October 24 to G-D for the lump sum price of $80,366.24, which was the amount of the original oral quotation by G-D. On October 6, 1977, representatives from Petrochem met with Ivey’s vice-president Don Hayes at Ivey’s office. At this meeting, Hayes delivered a purchase order to Wright for the compressor equipment in the amount of $89,073.62. Immediately prior to the issuance of the purchase order, discussions took place in which Petrochem told Hayes that Gardner-Denver was not going to honor their quotation. Ivey’s subsequently wrote to Petrochem on November 1 demanding performance or it would buy elsewhere. When Petrochem failed to supply the equipment, Ivey’s purchased the compressors from Ingersoll-Rand for a price of $121,000. Ivey’s then filed suit in the Chancery Court of Attala County, Mississippi, seeking $31,926.38 in damages plus interest and attorney fees from both Gardner-Denver and Petrochem. The case was removed to the United States District Court for the Northern District of Mississippi on diversity grounds, where both defendants moved for summary judgment.
View caseThe exception applies when goods are made to the buyer's unique specifications, are unsuitable for sale to others in the ordinary course of the seller's business, and the seller has made a substantial beginning of manufacture or procurement commitments before receiving notice of repudiation under circumstances indicating the goods are for that buyer.
Supporting sources
Yes. Goods are defined to include all things that are movable at the time of identification to the contract for sale, and the definition explicitly lists specially manufactured goods among the items covered.
Supporting sources
The seller must demonstrate that the goods were produced for the particular buyer, are not suitable for resale in the ordinary course, and that substantial manufacturing or procurement occurred before repudiation notice under circumstances reasonably indicating the buyer was the intended recipient.
Supporting sources
…the uniform commercial code's statute of frauds provision. Moreover, O.R.C. Sec. 1302.04 contains special provisions concerning specially manufactured goods and goods for which payment has been made and accepted. These terms are unique to the commercial sales field and a determination of rights often require referring to related uniform…