Question

Describe the UCC’s approach to requiring that certain contracts be in writing and identify the alternative methods of compliance under the code.

Answer 1

As per UCC (Uniform Commercial Code) certain contracts are to be in writing. Law allows and recognizes both written and oral contracts but certain contracts have to be in writing for them to be legally enforceable and to be binding.

As per UCC the following types of contracts have to be in writing – contracts with regards to real estate sales, contracts that have a completion period of more than one year, contracts that pertains to payment of someone else’s debt, etc.

UCC classifies 4 types of contracts that have to be in writing – land contracts, sale of goods in which the value exceeds $500, contracts that last for more than a year, contracts to be responsible for someone else’s debt.

There are three alternative methods of compliance under the code – (i) a contract which involves goods to be specially manufactured will be enforceable against the buyer if the goods that have been specially manufactured cannot be sold to other parties. (ii) a contract is enforceable if a party admits the existence of a contract for sale. The part can admit this in pleading or testimony. (iii) Thirdly if there has been a part payment of purchase price or receipt of goods no evidence is required in writing.

Alternative methods of compliance under the code are to ensure that party to the contracts is able to provide reliable evidence of the existence of a contract between the parties. This helps in preventing the enforcement of an unfounded claim.