136 MODULE 23 CONTRACTS

1] Oral contract involving specially manufactured goods (i.e., not saleable in ordinary
course of business) if seller has made substantial start in their manufacture
(or even
made a contract for necessary raw materials) is enforceable
2] Oral contract is enforceable against party who admits it in court but not beyond quan-
tity of goods admitted
3] Goods that have been paid for (if seller accepts. payment) or goods which buyer has
accepted are part of enforceable contract even if oral
EXAMPLE: B orally agrees to purchase 10,000 parts from S for $1 each. B later gives S $6,000 for
a portion of the parts. S accepts the money. In absence of a written agreement, B may enforce a
contract for 6,000 parts but not for the jull10,000 parts.
(b) Modifications of written contracts involve two issues under UCC
1] New consideration on both sides is not required underUCC although it is required un-
der common law
a] Under UCC, modification must be done in good faith
2] Modified contract must be in writing if contract, as modified, is within Statute of
Frauds (i.e., sale of goods for $500 or more)
EXAMPLE: S agrees orally to sell B 100 widgets for $4.8(J each. B later agrees, orally, to pay
$5.00 for the 100 widgets due to changed business conditions. The modified contract is not enforce-
able because it must have been in writing. Therefore, the original contract is enforceable.
EXAMPLE: Same as above except that the modification is in writing. Now the modified contract is
enforceable despite the fact that S is giving no new consideration.
EXAMPLE: X and Y have a written contract for the sale of goods for $530. They subsequently both
agree orally to a price reduction of $40. The modified contract for $490 is enforceable.
(c) Parties may exclude future oral agreements in a signed writing
(5) Agreement for sale of intangibles over $5,000 must be in writing (e.g., patents, copyrights, or
contract rights)
(6) Sale of securities must be in writing
(a) Must include price and quantity
2. When a writing is required and the UCC applies, it must
(1) Indicate in writing that a contract for sale has been made
(2) Be signed by party to be charged, and
(3) Specify quantity of goods sold
(4) However, note the following:'
(a) Any written form will do (e.g., letter, telegram, receipt, fax)
(b) Need not be single document (e.g., two telegrams)
(c) Need not be made at same time as contract
1] Must be made before suit is brought
2] Need not exist at time of suit (i.e., may have been destroyed)
(d) Signature need not be at end nor be in a special form so long as intent to authenticate ex-
isted (e.g., initials, stamp, printed letterhead, etc., of party to be charged)
1] Generally, signature sent by fax is enforceable
(e) May omit material terms (e.g., price, delivery, time for performance) as long as quantity is
stated. Reasonable terms will be inferred.
(f) Exception to . signature requirement exists under UCC when both parties are merchants-
one party may send signed written confirmation stating terms (especially quantity) of
oral
agreement to other party within reasonable time, then nonsigning party must object
within
ten days or the contract is enforceable against himlher
EXAMPLE: B agreed on January 10 to purchase 100 widgets at $6 each from S. They agreedthat de-
livery would take place on January 31. On January 14, B sent S a letter on B's letterhead that stated:
"We no longer need the 100 widgets we ordered on January 10. Don't ship them. "
This contract is enforceable against B even thougli the writing was later than the original oral
agreement.