Tuesday, January 23, 2007
Nebraska Court of Appeals finds sale of ongoing business that comprised real estate, buildings fixtures and goods was not subject to UCC Article 2 on Sales; however court affirms judgment in favor of seller because buyer of business waived condition precedent for an inventory of goods and inventory remaining after sale.MBH, Inc. v. John Otte Oil & Propane, 15 Neb. App. 341 Filed January 23, 2007. No. A-05-292 "Since the predominant purpose of the contract was the sale of an ongoing business. The essential elements of the contract are nongoods, including real estate, buildings, and goodwill, the sale was not one primarily of goods, and therefore Article 2 did not apply." However In the instant case, the terms of of the contract calling for (an inventory of existing product, fixtures, etc) became enforceable after the closing. The terms became defined by the parties' subsequent actions that indicated their interpretation of the terms. MBH's delivery of chemicals, fertilizer, and grain along with inventories of these items and Otte's acceptance of these items supplied the terms missing from paragraph 5, making it an enforceable provision. This occurred despite the fact that the joint inventory contemplated by the parties was not completed. We further explain our decision in our following response to Otte's argument that the trial court erred when it found that Otte waived the joint inventory as a condition precedent to enforcement of paragraph 5.