This is in the state of Pennsylvania.
My parents received an advertisement in the mail this summer from their heating oil company. The advertisement states "You are protected upside and downside! No other company does that!" (What downside protection means in heating oil is that if the price of oil goes down, the customer gets the difference back.) My parents tore the order form off the bottom of the ad and sent a check for $2000 (for x number of gallons) to prepay for their heating oil this winter (the first time they have ever prepaid), feeling secure because they were protected if the price of oil goes down.
Now of course, the economy has having problems and oil has become much cheaper. X amount of gallons now costs about $1000 instead of $2000. Still, my parents weren’t upset, because the oil company advertisement said that they were protected if oil went down.
Today a letter came in the mail from the oil company. "Dear Sir, we regret to inform you that we cannot lower the price of your oil because it will cost us too much money. In order to help you, we will lower your oil price 25 cents [a small fraction of what is has gone down] a gallon."
So how I’m interpreting it (in the terms of contract law) is that the advertisement was the offer, mailing in the order form was acceptance, and sending the check and beginning to receive oil was consideration. So, it would be a verbal contract, correct?
But, Pennsylvania has accepted the UCC, and I’m assuming the statute of frauds with it. There was no actual written contract signed by the oil company and my parents.
So, my question is, can my parents sue to recover the difference in oil prices?
The order form is a sufficient written contract. Even under the Statute of Frauds, a contract is enforceable under these circumstances, because payment was made and accepted.
UCC 2-201
(3) A contract which does not satisfy the requirements of subsection (1) but which is valid in other respects is enforceable;
…(c) with respect to goods for which payment has been made and accepted or which have been received and accepted.
Richard
August 31st, 2009 at 10:01 pm
The order form is a sufficient written contract. Even under the Statute of Frauds, a contract is enforceable under these circumstances, because payment was made and accepted.
UCC 2-201
(3) A contract which does not satisfy the requirements of subsection (1) but which is valid in other respects is enforceable;
…(c) with respect to goods for which payment has been made and accepted or which have been received and accepted.
Richard
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