Advent Systems Limited v. Unisys Corporation.

925 F.2d 670 (3rd Cir. 1991)

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Nature of the Case

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Facts

P is engaged primarily in the production of software for computers. P developed an electronic document management system (EDMS). D manufactures a variety of computers. D decided to market the document management system in the United States. In June 1987 P and D signed two documents, one labeled 'Heads of Agreement' (in British parlance 'an outline of agreement') and, the other 'Distribution Agreement.' P agreed to provide the software and hardware making up the document systems to be sold by D in the United States. P was obligated to provide sales and marketing material and manpower as well as technical personnel to work with D employees in building and installing the document systems. The agreement was to continue for two years, subject to automatic renewal or termination on notice. D decided it would be better served by developing its own system and in December 1987 told P their arrangement had ended. P filed a complaint for breach of contract, fraud, and tortious interference with contractual relations. The district court ruled that the UCC did not apply because although goods were to be sold, the services aspect of the contract predominated. A jury awarded damages to P in the sum of $4,550,000 on the breach of contract claim, and $4,350,000 on the count for wrongful interference with Unisys U.K. The district court granted judgment n.o.v. to D on the interference claim but did not disturb the verdict awarding damages for breach of contract. D contends that the relationship between it and P was one for the sale of goods and hence subject to the terms of the statute of frauds in the UCC. Because the agreements lacked an express provision on quantity, D insists that the statute of frauds bans enforcement.