UCC § 2-201- Formal Requirements; Statute of Frauds
1) Except as otherwise provided in this section a contract for the sale of goods for the price of $500 or more is not enforceable by way of action or defense unless there is some writing sufficient to indicate that a contract for sale has been made between the parties and signed by the party against whom enforcement is sought or by his authorized agent or broker. A writing is not insufficient because it omits or incorrectly states a term agreed upon but the contract is not enforceable under this paragraph beyond the quantity of goods shown in such writing.
2) Between merchants if within a reasonable time a writing in confirmation of the contract and sufficient against the sender is received and the party receiving it has reason to know its contents, it satisfied the requirement of subsection (1) against such party unless written notice of objection to its contents is given within 10 days after it is received.
3) A contract which does not satisfy the requirements of subsection (1) but which is valid in other respects is enforceable
a) if the goods are to be specially manufactured for the buyer and are not suitable for sale to others in the ordinary course of the seller’s business and the seller, before notice of repudiation is received and under circumstances which reasonably indicate that the goods are for the buyer, has made either a substantial beginning of their manufacture or commitments for their procurement; or
b) if the party against whom enforcement is sought admits in his pleading, testimony or otherwise in court that a contract for sale was made, but the contract is not enforceable under this provision beyond the quantity of goods admitted; or
c) with respect to goods for which payment has been made and accepted or which have been received and accepted (Sec. 2-606)
Question #1: Does this fall under the UCC SoF?
Contract for sale of goods for $500 or more not enforceable unless there is a writing sufficient to indicate that a contract has been made between the parties.
Question #2: Does meet requirements of the UCC SoF? Three requirements for a memorandum:
Evidence a contract for the sale of goods
An offer is NOT enough (under RS 131 an written offer can satisfy for the common law but the UCC is looking for a contract)
Does not need to say “this is a contract”
Enough evidence that there was an oral contract and a real transaction occurred
It must be singed
Must be a signed writing
Writing includes printing, typewriting, or any other intentional reduction to tangible form UCC 1-201(46)
Signed includes any symbol executed or adopted by a party with intention to authenticate a writing UCC 1-201(39)
It must specify a quantity
Quantity can be incorrectly stated (but that puts a cap on the damages that can be enforced)
(while Common Law requires that ALL the essential terms be there, UCC does NOT… UCC ONLY requires that a quantity be stated)
Question #3: is there an exception? Four exceptions under the UCC:
1) Specially manufactured goods- if you are making goods for just one buyer court should enforce those contracts even if there isn’t a writing because that is sufficient proof (but still need to show that there was an underlying agreement)
2) Admission- no contract is required to the extent of the admission. If a party admits that there is a contract then this is sufficient evidence that a contract exists. (not majority rule under the CL)
If BOTH parties are merchants, one of them sends a written confirmation, to which the other does not object within 10 days, that written confirmation may be used to satisfy the SoF even if it is not signed by the person who receives it. But it has to be sufficient against the sender.
As long as it is sufficient/ can be enforced against the person who is sending it, then it is not unfair to make it enforceable against the person receiving it.
Sufficient against the sender:
Show the existence of the contract
It has to be signed by the sender
It has to show the quantity of goods
Some courts add a 4th element that it must say that it is a written confirmation of the prior oral agreement (intended to drive out objection)
Other courts reject this and say that it is too much (Bazak pg. 345)
Buffaloe v. Hart
FACTS
Plaintiff Buffaloe, rented barns from Defendant Hart. Plaintiff attempted to purchase the barns from Defendant by making an installment payment. Defendant returned the payment and sold the barns to others.
ISSUE
Did the jury err in enforcing the contract?
HELD
No. The Court did not err in enforcing the contract. Because the sale of the barns involves the sale of goods for at least $500, the agreement falls under the statute of frauds provision in the UCC.
A check may satisfy the requirements of the statute of frauds if it contains sufficient writing to indicate the contract of sale, is signed by the party against whom enforcement is sought, and indicates quantity.
Because Defendant did not sign the check, it does not satisfy the requirements of the statute of frauds.
Plaintiff argues that even though it does not satisfy the statute of frauds, the agreement should be enforced under the doctrine of part performance. The Court determines there is evidence whereby a jury could determine that the agreement is enforceable under part performance. Therefore, the Court upholds the jury verdict.
