UCC Statute of Frauds

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1. A "signed writing" to satisfy the Statute of Frauds:

1. a writing - which may include a electronic documentation (e.g., e-mail); 2. that is signed by the party against whom enforcement is sough; 3. which is sufficient to indicate that a contract for sale has been made between the parties.

How satisfy the UCC Statute of Frauds:

5 ways to satisfy the UCC Statute of Frauds. 1. Signed writing; 2. Merchant's confirmation; 3. In-court admission; 4. Part performance; OR 5. Substantial reliance by the Seller of specially manufactured goods.

5. "Substantial Reliance by the Seller of Specially Manufacture Goods" to satisfy the Statute of Frauds

An aggrieved seller can secure enforcement of an oral contract by establishing the following 5 elements: 1. goods are to be specially manufactured for the buyer; 2. goods are not suitable for sale to others in the ordinary course of the seller's business; 3. seller has "substantially" begun to manufacture, or made commitments to procure, the goods; 4. actions undertaken to begin to manufacture or procure occurred under circumstances that reasonably indicate that the goods are for the buyer; and 5. actions undertaken to begin to manufacture or procure occurred before the seller received notice of the buyer's revocation.

4. "Part Performance" to satisfy the Statute of Frauds

Despite the absence of a signed writing, an otherwise valid contract is enforceable "with respect to goods for which payment has been made and accepted or which have been received and accepted." Note: the part performance exception does not apply UNLESS there are actions by both parties indicating that a contract for sale exists.

What if there are NO Quality Terms?

If there is no quality term, the contract is altogether unenforceable, subject to 2 exceptions: 1. where other language in the writing provides an unambiguous basis for measuring quantity (such as, my 1998 Honda Odyssey); and 2. in the case of output and requirements contracts, the expression "output," "requirements," or their equivalent satisfies the quantity requirement under the UCC.

What does a valid merchant's confirmation require?

It requires a writing that 1. is "sufficient against the sender" 2. is "in confirmation of the contract" 3. is "sent within a reasonable time" of the main oral agreement;" and 4. the contents of which the receiving merchant has "reason to know."

Can a written offer be enough to satisfy the UCC Statute of Frauds?

No, it may not be enough. The UCC's requirement says the writing must be "sufficient to indicate that a contract for sale has been made between the parties," thus it suggests that only a writing that is contemporaneous with or subsequent to contract formation will satisfy the test. HOWEVER, don't forget the Firm Offer Rule!

What is a "timely fashion" to object to the "merchant's confirmation?"

Provide written notice of objection to the confirmation's contents within 10 days of receipt, but a would-be objection that is itself sufficient against the objector will satisfy the Statute against the objector.

2. A "Merchant's Confirmation" to satisfy the Statute of Frauds:

The UCC Statute of Frauds may be satisfied when TWO MERCHANTS enter an oral agreement and one of them sends the other a written confirmation of the agreement; AND recipient whom the Statute is being used against fails to object to the confirmation in a timely fashion.

3. "In-Court Admission" to satisfy the Statute of Frauds

When a party against whom enforcement is sought "admits in his pleading, testimony, or otherwise in court that a contract for sale was made." The in-court admission exception will not secure enforcement of the contract in question "beyond the quantity of goods admitted."

Does the UCC Statute of Frauds apply if a contract previously did not fall within the Statute, but when modified it does?

Yes, the UCC Statute of Frauds also applies if a contract as modified falls within the Statute (e.g., the contract is modified such that the price has gone from $300 to $600). By the same token, if the newly modified contract now falls outside of the Statute of Frauds, it does not apply.

Does element 3 of a "signed writing" require that the quantity terms be in the writing?

Yes. Satisfaction of the UCC Statute of Frauds requires the term indicating the quantity of goods sold in the transaction. A contract is unenforceable beyond the quantity of goods shown in the writing, irrespective of the parties' actual agreement.


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