Kenco Homes, Inc., v. Williams

94 Wash. App.219 (1999)

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Nature of the Case

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Facts

P buys mobile homes from the factory and sells them to the public. Sometimes, it contracts to sell a home that the factory has not yet built. It has 'a virtually unlimited supply of product.' P and D and Williams signed a written contract whereby D agreed to buy, a mobile home that P had not yet ordered from the factory. The contract called for a price of $39,400, with $500 down. The contract would be enforceable only if D could obtain financing. The contract would be enforceable only if D later approved a bid for site improvements. Financing was to cover the cost of the mobile home and the cost of the land on which the mobile home would be placed. The contract stated that P shall have all the rights of a seller upon breach of contract under the Uniform Commercial Code, except the right to seek and collect 'liquidated damages' under Section 2-718. The contract provided for reasonable attorney's fees. D accepted P's bid for site improvements. D received preliminary approval on the needed financing. D gave P a $ 600 check so P could order an appraisal of the land on which the mobile home would be located. Before Kenco could act, D stopped payment on the check and repudiated the entire transaction. His reason, according to the trial court's finding of fact, was that he 'had found a better deal elsewhere.' P had not yet ordered the mobile home. P's only out-of-pocket expense was a minor amount of office overhead. P sued D for lost profits. The court found that D had breached the contract and that P had lost profits in the amount of $11,133 ($6,720 on the mobile home, and $4,413 on the site improvements). The court found that P would be adequately compensated by retaining Williams' $500 down payment and $1,800 in attorney's fees. P appealed.