Question

The Uniform Commercial Code (UCC) includes a number of provisions that apply to contracts between merchants. One provision of the UCC is the Statute of Frauds.

Hot Coffee (a fictional Florida corporation) entered into a $1,000 contract for the sale of their mugs to an independent grocery store called Foods ‘r’ Us. Are there any specific requirements for Hot Coffee’s contract based on the Statute of Frauds?

In your assignment:

Summarize the Statute of Frauds

Discuss what, if any, the specific requirements would be for the contract between Hot Coffee and Foods ‘r’ Us

Submission Format

The length of your response is conditional on the question. Answer fully, but concisely.

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Answer 1

The Statute of Fraud:

Statute of frauds is a legal requirement that applies to certain type of contracts and according to statute of frauds these contracts need to be in writing in order to be enforceable.

The types of contract include:

• Contract involving the sale of an interest in land
• Contracts in consideration of marriage
• Contracts that cannot be performed within one year
• Contracts where one party agrees to pay the debt of another
• Contracts for sale of goods worth more than $500
• Contracts where the estate executor need to pay the estate debts from personal funds

All these contracts need to be in writing to be legally enforceable and the purpose of the requirement is to prevent the chances of fraud and make sure that the parties are getting involved in the contract seriously.

There are certain exceptions to this rule.

There are certain exceptions and one of them is where the party has relied on the promise made by the party which caused to their detriment.

The UCC is a set of commercial laws that look to grant safe and conflict-free sales and transactions in the U.S. In the part of this code that deals with sales;

we can find the Statute of Fraud, which deals with what kinds of contracts need to be signed in order for the buyer to be charged.

It states that the actual sales contract doesn’t need to be put into writing apart from a small signed form, with the exception of written confirmation not objected to within ten days of it being sent.

Goods that were manufactured specially for a consumer are exempted for this Statute if the manufacturer has shown commitment to the item being delivered as arranged.

The Statue of Fraud in the contract between Hot Coffee and Foods ‘r’ us:

The statute of frauds for contracts under UCC requires that contracts for sale of goods worth more than $500 should be in writing to be enforceable.

In this case, Hot Coffee has entered into contract for the sale of mugs with Foods’r’Us for $1000 and hence the contract must be in writing. Else the contract will not be enforceable.

In the case of the 1000-dollar contract entered by Hot Coffee to sell to the independent store, under the Statute of Fraud, as the total cost of the mugs is 1000 dollars (over the 500-dollar limit), the contract must be put into writing and signed by the seller (Hot Coffee) as per law, but it is recommended that both parties sign it in case there are problems with payment.

However, if the mugs are custom made for Foods ‘r’ us, and they can’t be sold to a different supermarket or another kind of store, Foods ‘r’ us is obligated by law to release payment if they are unhappy with the product, even if the contract is not signed or properly in writing.