Also known as: specially manufactured goods · special manufacture exception · specially manufactured exception · UCC § 2-201(3)(a) · custom goods exception · statute of frauds special manufacture
Written by attorneys · grounded in primary & secondary sources — see below
An exception to the statute of frauds that renders a contract for the sale of goods enforceable without a signed writing when the goods are specially manufactured for the buyer and the seller has made a substantial beginning of manufacture or commitments for procurement under circumstances reasonably indicating that the goods are for the buyer.
Sophia Singh ordered a $600 sign with unique text and design for her new law office from Skyline Construction. Skyline began cutting the custom panels and ordered specialized lighting components before Singh canceled. The court enforced the oral agreement because the goods were specially manufactured and Skyline had started production in circumstances showing they were for Singh.
Sentinel Security orally agreed to buy custom-forged metal components from Clifford-Jacobs Forging Co. for a proprietary security system. The forging company began shaping the unique dies and materials before Sentinel backed out. The court held the contract enforceable without a writing because the items were specially manufactured and production had begun in a manner indicating they were for Sentinel.
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The seller must demonstrate that the goods were to be specially manufactured for the buyer and that the seller made a substantial beginning of manufacture or commitments for procurement under circumstances reasonably indicating the goods were for the buyer.
The exception focuses on whether the goods are specially manufactured and the seller has begun work or procurement indicating they are for the buyer. Courts consider whether the customization makes resale commercially impractical but do not require proof of zero resale value.
The specially manufactured goods exception operates independently of the merchant confirmation rule. It excuses the writing requirement when the statutory conditions for special manufacture are met even if no confirmation was sent or received.
Yes. The statute is satisfied if the seller has made commitments for procurement of the goods under circumstances reasonably indicating they are for the buyer even if actual manufacture has not yet started.
…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…