Question

Wintersport Ltd. contacted Millionaire.com, Inc., to offer advertising, production, and printing services for Millionaire.com's magazine, Opulence . Wintersport and Millionaire.com entered into a $170,000 contract for the printing of one monthly issue in October 2000. They performed that contract and entered negotiations to print the next month's issue. Strong, senior vice-president of Millionaire.com, and Leiter, president of Wintersport, handled most of the negotiations and communications. Due to financial difficulties, Millionaire.com reduced the size of its order for the second issue and requested payment terms on the reduced price of $80,000. Concerned about Millionaire.com's creditworthiness, Leiter told Strong that Wintersport would only extend credit to Millionaire.com if Millionaire.com paid a $10,000 down payment and White personally guaranteed the balance due. During a phone call between their respective offices in Washington and South Carolina, Leiter requested and received White's oral agreement to the personal guaranty. Leiter then sent a confirming fax to White's office, and White express mailed to Wintersport a $10,000 check drawn on Millionaire.com's account. When Millionaire.com failed to pay the amount due on the contract, Wintersport filed suit against White and others.
White argued that the action should have been dismissed because the statute of frauds prevented the enforcement of his oral guaranty. Is he correct?



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  • CreatedJuly 16, 2014
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