This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
It is often difficult to determine whether a contract is one for the sale of a chattel and so within the statute of frauds, or for work and labor, and so not within the statute. The courts do not agree as to the test for distinguishing these two classes of contracts. The following tests, different in form though not always differing in practical results, are the chief of those adopted by the courts: (1) According to some authorities if the goods to be delivered are not in existence, but are to be manufactured thereafter, the contract is not within the statute.1 (2) In some states it is held that if any work must be performed upon the chattel sold before delivery, to put it in a condition different from what it was when the contract of sale was made, the contract is not a contract of sale.2 So a contract to cut lumber and to deliver it, is not within the statute under this theory.3 By statute in some states, if "labor, skill or money are necessarily to be expended in producing or procuring" the chattel to be delivered, the contract is not one of sale. As construed, this statute applies only where special skill or labor is necessary. Hence a sale of growing grain, to be harvested and threshed by vendor,4 or a sale of corn, to be shelled and corn unfit for shelling to be thrown out,5 or a sale of corn to be sorted and put in bags,6 are all sales of chattels within such statute. (3) Another test applied by some courts is this: if, by the contract the vendor is to perform certain work personally, the contract is not one of sale,7 but if he can perform the contract by procuring the property to be delivered by him from such source as he pleases, the contract is one of sale.8 (4) A still different test is the following: if the goods are to be manufactured upon a special order and of a particular design, the contract is not one of sale,9 while, if the goods to be manufactured are such as are manufactured in the ordinary course of the manufacturer's business, and are marketable, the contract is one of sale.10 A contract to manufacture an article "to order and as a thing distinguished from the general business of the maker" is said not to be a sale.11 Thus a contract to manufacture iron-work for a building,12 or stone-work,13 or a contract to manufacture and erect a monument,14 or to manufacture lumber of special sizes, as for a narrow-gauge railroad,15 or to manufacture hoe-shanks according to a pattern to be furnished by the party ordering them,16 or to furnish and erect certain "patent portable houses,"17 are each held not to be contracts for the sale of goods with the statute of frauds. On the other hand, a contract to deliver shoes to be made to order, but of a kind suitable for the general trade,18 is a sale within the meaning of the statute. Where this distinction obtains a contract for an article to be made on special order, which will not be marketable when made, is not a sale of goods, though the manufacturer purchases most of the different parts of the article and puts them together.19 Where A agrees with B to order certain goods from X, to be made to order by him and delivered to A, who is to deliver them to B, some courts hold that the contract between A and B is a sale,20 while others hold that it is not.21 (5) The test finally adopted in England is that the intention of the parties controls, and if they intend the contract primarily to result in transferring the title of a chattel from one person to another, the contract is one of sale, no matter by whom or how the chattel is to be produced. Thus in the leading case adopting this test,22 A made to order for B, two sets of false teeth to fit B's mouth. The contract was held to be a sale, though clearly the teeth were not marketable.
3 Hatch v. McBrien, 83 Mich. 159; 47 N. W. 214.
4 Mace v. Heath, 30 Neb. 620; 46 N. W. 918.
1 Warren Chemical, etc., Co. v. Holbrook, 118 N. Y. 586; 16 Am. St. Rep. 788; 23 ST. E. 908; Higgins v. Murray, 73 N. Y. 252; Cooke v. Millard, 65 N. Y. 352; Crookshank v. Burrell, 18 Johns. (N. Y.) 58; 9 Am. Dec. 187.
2Rentch v. Long, 27 Md. 188; Eichelberger v. McCauley, 5 Harr. & J. (Md.) 213; 9 Am. Dec. 514.
3 Bagby v. Walker, 78 Md. 239; 27 Atl. 1033.
4 Mighell v. Dougherty, 86 la. 480; 41 Am. St. Rep. 511; 17 L. R. A. 755; 53 X. W. 402.
5 Lewis v. Evans, 108 la. 296; 79 N. W. 81. (Citing Downs v. Ross, 23 Wend. (X. Y.) 270; Hardell v. McClose, 1 Chand. (Wis.) 271; Brown v. Sanborn, 21 Minn. 402.)
6 Dierson v. Petersmeyer, 109 la. 233; 80 X. W. 389.
7 A contract for the sale of potatoes to be raised in the future. Pitkin v. Noyes, 48 X. H. 294; 2 Am. Rep. 218; 97 Am. Dec. 615. Contra, Forsyth v. Mann, 68 Vt. 116; 32 L. R. A. 788; 34 Atl. 481.
8Prescott v. Locke, 51 X. H. 94; 12 Am. Rep. 55.
9 Goddard v. Binney, 115 Mass. 450; 15 Am. Rep. 112; Brown, etc., Co. v. Wunder, 64 Minn. 450; 32 L. R. A. 593; 67 X. W. 357; Hientz v. Burkhard, 29 Or. 55; 55 Am. St. Rep. 777; 31 L. R. A. 508; 43 Pac. 866; Puget Sound Machinery Depot v. Rigby, 13 Wash. 264; 43 Pac. 39;
Goss v. Heckert, - Wis. -; 97 X. W. 952.
10 Pratt v. Miller, 109 Mo. 78; 32 Am. St. Rep. 656; 18 S. W. 965; Williams-Hayward Shoe Co. v. Brooks, 9 Wyom. 424; 64 Pac. 342. See for other cases recognizing this test Flynn v. Dougherty, 91 Cal. 669; 14 L. R. A. 230; 27 Pac. 1080; Atwater v. Hough, 29 Conn. 508; 79 Am. Dec. 229; Lewis v. Evans, 108 la. 296; 79 X. W. 81; Abbott v. Gilchrist, 38 Me. 260; Mixer v. How-arth, 21 Pick. (Mass.) 205; 32 Am. Dec. 256; Lamb v. Crafts, 12 Met. (Mass.) 353; Gardner v. Joy, 9 Met. (Mass.) 177; Meincke v. Falk, 55 Wis. 427; 42 Am. Rep. 722; 13 X. W. 545.
11 Finney v. Apgar, 31 X. J. L. 266, 270.
12 Hientz v. Burkhard, 29 Or. 55; 54 Am. St. Rep. 777; 31 L. R. A. 508; 43 Pac. 866.
13 Flynn v. Dougherty, 91 Cal. 669; 14 L. R. A. 230; 27 Pac. 1080.
14Forsyth v. Mann, 68 Vt. 116; 32 L. R. A. 788; 34 Atl. 481; Fox v. Utter, 6 Wash. 299; 33 Pac. 354.
15 Orman v. Hager, 3 N. M. 568; 9 Pac. 363.
16 Hight v. Ripley, 19 Me. 137.
17 Phipps v. MeFarlane, 3 Minn. 109; 74 Am. Dee. 743.
18 Pratt v. Miller. 109 Mo. 78; 32 Am. St. Rep. 656; 18 S. W. 965; Williams - Hayward Shoe Co. v. Brooks, 9 Wyom. 424; 64 Pac. 342.
19 Puget Sound Machinery Depot v. Rigby, 13 Wash. 264; 43 Pac. 39.
20 Smalley v. Hamblin, 170 Mass. 380; 49 N. E. 626. This view was taken on the principle of Pitkin v. Noyes, 48 N. H. 294; 2 Am. Pvop. 218; 97 Am. Dec. 615, that the personal services of the adversary party were not contracted for; but on the contrary, the work could be done by another.
21 Bird v. Muhlinbrink, 1 Rich. L. (S. C.) 199; 44 Am. Dec. 247.
22 Lee v. Griffin, 1 B. & S. 272.