Procyon Corp. v. Components Direct, Inc.

Procyon Corporation sued Components Direct, Inc. for breach of contract after Components failed to deliver goods under an oral agreement supported by an irrevocable letter of credit. The trial court held Procyon’s irrevocable letter of credit satisfied the statute of frauds and found Components liable for Procyon’s lost profits resulting from the breach.

Components argues the judgment must be reversed because the letter of credit did not satisfy the statute of frauds, or, assuming the statute was satisfied, because Components’ performance was impossible. Both contentions lack merit. We affirm.

I

On August 30, 1984, Components offered Procyon 1,000 computer memory chips for $29 each and guaranteed delivery within 6 weeks. As a condition of delivery, Components required Procyon to obtain an irrevocable letter of credit issued to Components’ bank.

Procyon’s bank issued the irrevocable letter of credit to Components’ bank on September 7, 1984. The letter of credit included a description of the chips, sales price, date of delivery, identification of the parties and Procyon’s bank’s warranty that all requests for payment in accordance with the terms of sale would be…