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Webstar Corp. orally agreed to sell Northco, Inc. a computer for $20,000. Northco sent a
signed purchase order to Webstar confirming the agreement. Webstar received the purchase
order and did not respond. Webstar refused to deliver the computer to Northco, claiming that
the purchase order did not satisfy the UCC Statute of Frauds because it was not signed by
Webstar. Northco sells computers to the general public, and Webstar is a computer
wholesaler. Under the UCC Sales Article, Webstar’s position is
A. Incorrect because it failed to object to Northco’s purchaser order.
B. Incorrect because only the buyer in a sale-of-goods transaction must sign the contract.
C. Correct because it was the party against whom enforcement of the contract is being sought.
D. Correct because the purchase price of the computer exceeded $500.
A, The Statute of Frauds generally requires contracts for a sale of goods of $500 or more to be in
writing and signed by the person refusing performance. However, there are several exceptions, and this
scenario illustrates one of them. If between merchants a confirmatory memorandum is sent and is not
objected to in writing within 10 days by the merchant receiving it, then the Statute of Frauds is satisfied.
Webstar must, therefore, honor this valid oral contract.
Why is it not B, that only the buyer must sell the contract. In an earlier explanation, it says, “The Statute of Frauds under the UCC requires only the signature of the person to be charged, the quantity of goods ordered, and written evidence of an agreement. The Statute itself does not require anything else to be in writing in order for the oral contract to be enforceable.” Isn’t that a contradiction to this answer choice?
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