Why Written Contracts are Essential Under NY UCC
In the world of business, agreements can sometimes be made with a handshake or a verbal promise. However, when it comes to the sale of goods in New York, relying solely on verbal agreements can be risky and legally insufficient.
Statute of Frauds: The $500 Rule
Under UCC §2-201, often referred to as the Statute of Frauds, contracts for the sale of goods priced at $500 or more must be in writing to be enforceable.
What Should the Written Contract Include?
Identification of Parties: Names and roles of the buyer and seller.
Description of Goods: Clear description of what is being sold.
Quantity: The amount of goods involved.
Signatures: The contract must be signed by the party against whom enforcement is sought.
Why Written Contracts Matter
Legal Enforcement:
Without a written contract, you may not be able to enforce the agreement in court.
Clarity:
Written terms help prevent misunderstandings by clearly outlining each party's obligations.
Record-Keeping:
Provides a tangible record of the agreement for future reference.
Exceptions to the Rule
There are limited exceptions where an oral contract may be enforceable, such as when goods are specially manufactured or when there has been partial payment or acceptance of goods.
Key Takeaways:
Always put agreements involving goods over $500 in writing.
Ensure the contract includes all essential terms and is signed properly.
A written contract protects both parties and facilitates smoother business operations.
Disclaimer:
This article is for informational purposes only and does not constitute legal advice. Although I am an attorney, I am not your attorney, and reading this article does not create an attorney-client relationship. For advice pertaining to your specific situation, please consult a qualified attorney licensed in your area.
Comments