Contracts for the sale of goods over a certain value

Definition

Contracts for the sale of goods over a certain value refer to legally binding agreements that involve the transfer of ownership of goods priced above a specific monetary threshold, typically $500, under the Uniform Commercial Code (UCC). These contracts require certain formalities for enforceability, including written documentation, which helps ensure clarity and accountability in commercial transactions.

5 Must Know Facts For Your Next Test

1. Under the UCC, contracts for the sale of goods valued at $500 or more must be in writing to be enforceable, in line with the Statute of Frauds.
2. The requirement for a written contract helps prevent fraud and misunderstandings by documenting the terms of the agreement.
3. Oral contracts can still be enforced if they meet certain exceptions, like when goods are specially manufactured or when one party has already performed their obligations.
4. Contracts for the sale of goods can include various terms such as price, quantity, delivery, and payment methods, which must be agreed upon by both parties.
5. Both parties involved in such contracts are generally considered to have a duty of good faith in their performance and enforcement under the UCC.

Review Questions

• How does the UCC influence contracts for the sale of goods over a certain value, particularly regarding enforceability?
  • The UCC influences contracts for the sale of goods over a certain value by establishing that these agreements must be in writing to be enforceable when the value exceeds $500. This requirement falls under the Statute of Frauds and is intended to reduce disputes over terms and conditions. Additionally, it sets out essential principles and guidelines that govern commercial transactions, ensuring both parties understand their rights and obligations.
• What are some exceptions to the written requirement for contracts involving the sale of goods over a certain value?
  • Some exceptions to the written requirement for contracts involving sales over $500 include cases where goods are specially manufactured for a buyer and cannot be sold to others, or when one party has already partially performed their contractual obligations. If payment has been made and accepted, it can also lend support to enforcing an oral contract. These exceptions highlight situations where written documentation may not be strictly necessary while still protecting parties' interests.
• Evaluate how the duty of good faith impacts the enforcement of contracts for the sale of goods over a certain value within commercial transactions.
  • The duty of good faith significantly impacts the enforcement of contracts for the sale of goods over a certain value by requiring both parties to act honestly and fairly throughout their dealings. This obligation ensures that neither party undermines the purpose of the contract or engages in deceptive practices that could harm the other party's interests. When evaluating disputes related to these contracts, courts often consider whether actions taken align with this duty, influencing outcomes and promoting trust within commercial relationships.

Related terms

Uniform Commercial Code (UCC):

A comprehensive set of laws governing commercial transactions in the United States, which standardizes the rules for sales and leases of goods.

Statute of Frauds:

A legal doctrine requiring certain contracts to be in writing to be enforceable, applicable to contracts for the sale of goods exceeding a specific value.

Merchant:

An individual or business engaged in commercial trade or transactions, typically held to a higher standard under UCC provisions.