Colorado Carpet

September 1, 2011

File: Palermo

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Colorado Carpet Installation, Inc. v. Palermo, 668 P. 2d 1384 (Colo. 1983): An oral contract involving the sale of carpets, where the carpets were stock items and were suitable for the sale to others in the ordinary course of the sellers business, is not enforceable under the specially manufactured goods exception of the statute of frauds.

I. FACTS:

In April 1980, Jack Duran, president of Colorado Carpet began negotiation with the Palermos for the installation of carpeting, carpet padding, tile and vinyl floor covering in their home. Id. at 1386. Further negotiations included a written proposal which referred to Colorado Carpet as the “seller” and the Palermos as the “customer”. The proposal offered for the Palermos’ acceptance of the carpeting, padding, tile and vinyl for a cost of $ 4,775. The proposal expressly included all labor within the cost of the materials. Id. Duran testified that Mrs. Palermo orally accepted the proposal on or about April 25, 1980, shortly after he submitted it to her. Mrs. Palermo denied accepting the written proposal. Id. On April 30 and May 1, 1980, Colorado Carpet placed orders with Georgia and California manufacturers. The orders required the carpets to be cut into segments in order to permit effective installation in the Palermo’s home. Colorado Carpet also purchased and delivered ceramic tile to the Palermo home for installation. However Mrs. Palermo had a disagreement with Colorado Carpets tile man and arranged for another contractor to supply and install other tile. Id After unsuccessful negotiations, Colorado carpet removed the tile from the Palermo’s, returned half of it to the supplier and sold the other half. It also shipped back some of the carpet to the manufacturer for some credit and was able to sell some carpeting to a local purchaser. Id at 1387. The trial court found that the proposal between Mrs. Palermo and Colorado Carpet...