R5 M3- Contracts: Part III

Question 1

Greed Co. telephoned Stieb Co. and ordered 30 tables at $100 each. Greed agreed to pay 15% immediately and the balance within thirty days after receipt of the entire shipment. Greed forwarded a check for $450 and Stieb shipped 15 tables the next day, intending to ship the balance by the end of the week. Greed decided that the contract was a bad bargain and repudiated it, asserting the statute of frauds. Stieb sued Greed. Which of the following will allow Stieb to enforce the contract in its entirety despite the statute of frauds?

A.	Stieb shipped 15 tables.

B.	Greed admitted in court that it made the contract in question.

C.	The contract is not within the requirement of the statute of frauds.

D.	Greed paid 15% down.

Answer 1

Choice “B” is correct. The Statute of Frauds requires contracts involving the sale of goods to be evidenced by a writing if the price is $500 or more. However, if any of the following exceptions apply, an oral contract will be enforceable even without a sufficient writing:

Specially manufactured goods

Written confirmation

Admitted in court

Performed (enforceable to the extent of the performance of the party sought to be held liable)

Choice “A” is incorrect. Stieb’s partial shipment would bind Greed only if Greed accepted the shipment and only to the extent of the goods accepted (no more than 15 tables).

Choice “C” is incorrect. The contract is within the Statute of Frauds because it is for the sale of goods and the price clearly exceeds the $500 threshold.

Choice “D” is incorrect. Partial payment would make the contract enforceable only to the extent of the payment accepted.

Question 2

The Statue of Fraud require contracts involving the sale of goods to be evidence by a writing if the price is $500.00 or more. The following exceptions apply an oral contract will be enforceable even without a sufficient writing:

Specially manufactured goods

Written confirmation

Admitted in court

Performed (enforceable to the extent of the performance of the party sought to be held liable)

Answer 2

-Specially manufactured goods - unique in which it cannot be sold to another customer

-Written Confirmation –> a merchant sends another merchant a written confirmation of a contract that is sufficient to bind the sender it will also bind the recipient if she does not object within 10 days

For example: If Randy retailer call Wendy wholesale and orders $700 worth of goods and then sends Wendy a written and signed confirmation of the order. If Wendy does not object, the confirmation is sufficient to bind Wendy even though she did not sign it.)

• Contract that parties have admitted in court.
• Contracts that have been performed, to the extent that the performance has been accepted (e.g. an oral contract for 200 widgets at $5 each cannot be enforced, but if 150 widgets are delivered and accepted, it is enforceable to the extent of the 150 accepted widgets.)