Contract and Contract Law

Defendant, Gray Communications, desired to build a television tower. After a number of negotiation sessions conducted by telephone between the Defendant and Plaintiff, Kline Iron, the parties allegedly reached an oral agreement under which the Plaintiff would build a tower for the Defendant for a total price of $1,485,368. A few days later, Plaintiff sent a written document, referred to as a proposal, for execution by Defendant. The Proposal indicated that it had been prepared for immediate acceptance by Defendant and that prior to formal acceptance by Defendant it could be modified or withdrawn without notice. A few days later, without having executed the Proposal, Defendant advised Plaintiff that a competitor had provided a lower bid for construction of the tower. Defendant requested that Plaintiff explain its higher bid price, which Plaintiff failed to do. Defendant then advised Plaintiff by letter that it would not be retained to construct the tower. Plaintiff then commenced suit alleging breachof an oral contract, asserting that the oral agreement was enforceable because the common law of contracts, not the UCC, governed the transaction and that under the common law a writing is not necessary to cover this type of transaction. Even if the transaction was subject to the UCC, Plaintiff alternatively argued, the contract was within the UCC “merchant’s exception.”

Is the plaintiff correct in its assertions? Discuss.


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