Monday, January 9, 2012

MBE Fast Fact: UCC Statute of Frauds

The Statute of Frauds under the UCC is implicated in a very specific situation. You need to consider it whenever the agreement that is the subject of the contract is for $500 or more. So, for example, x contracts with y to purchase 100 widgets at a price of $6/widget. Because the agreement here is for $600, you must consider the statute. However, the analysis does not end there. Under the UCC, there are 4 exceptions to the general rule that will take the contract out of the statute. The first is if the goods that are the subject of the contract are specially manufactured for the buyer. Next is if the the contracting parties are merchants, and there is a written confirmation of their oral agreement. Next, is if there is an admission in the pleadings that a contract has, in fact, been entered into. Finally, an exception is if there is partial payment or delivery made and accepted. (This last one is similar to the part-performance doctrine under the common law.) The MBE often tests exceptions, so be sure to consider them whenever the Statute of Frauds is implicated under the UCC.

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