Question

Apply the following facts to the next two questions.     

The publication of the original UCC in 1952 sparked an expansion of the statute of frauds in the United States to cover sales of goods of $500 or more. At about the same time (in 1954), the British Parliament repealed its longstanding statute of frauds as applied to sales of goods. Some have argued that we should scrap UCC §2-201 on the grounds that it encourages misdealing as much as it prevents fraud. Consider the following two hypotheticals:     

(In the United States) Johnny is looking at a used Chevy Tahoe. He knows that the $7,000 price is a good one, but he wants to go online and see if he can find an even better deal. In the 20 minutes he has been with the car’s current owner, the owner has received three phone calls about the car. Johnny wants to make sure that no one else buys the car while he is thinking the deal over, so he makes a verbal agreement to buy the car and shakes the seller’s hand. He knows that because of the statute of frauds and the fact that nothing is in writing, he does not yet have any enforceable obligation to buy the car.    

(In the United Kingdom) Nigel sells used Peugeots in Liverpool. When he senses interest from customers, he aggressively badgers them until they verbally commit to buy. If the customers later get cold feet and try to back out of the deal, he holds them to the verbal contracts. Because there is no longer a UCC-style statute of frauds in Britain, the buyers are stuck

Answer 1

In England, there were many laws about land, but few for contracts. English judges were only beginning to acknowledge that an exchange of mere promises, with no money or property changing hands, might lead to an enforceable agreement. But merchants dealt in the sale of goods not real estate. Their livelihood depended upon promises, on the rapid movement of their wares and on their ability to enforce bargains. The merchants were dissatisfied with few remedies that the courts offered businessmen throughout England and the Continent began to treat their own customs as law and to settle disputes in trade organizations rather than civil courts. The body of rules they relied on became known as law merchant.

 

This new doctrine focused on promises, the sale and exchange of goods, and payment. Here the willingness and voluntary consent are inherent in making promises. On sensing the interest from customers, he aggressively badgers them until they verbally commit to buy.

 

In the US, J is intending to buy a used Chevy Tahoe. The price is reasonable, amounting to $7000. Though he is willing to go online and look for a better deal. While being with the car owner, he could assess the other buyer’s interest in the car. J wants an assurance that he only buys the car. Thus he promises to buyer and is aware that such oral promises cannot be enforced.

 

Here the Statute of Frauds. UCC §2-201 requires a writing for any sale of goods worth $500 or more. J perpetrates to take advantage of this clause.

 

Conclusion:

Both J and N acted wrongfully, aware of the loopholes or the provisions of the law but J has acted more wrongfully as he used UCC in negatively and in case of N the contract is bound by the common law of Britain.

 

Good faith is the base of UCC but J used it to deceive the seller which is not intended by the statue.

Good faith is the base of UCC but J used it to deceive the seller which is not intended by the statue.