The statute of frauds in the UCC has three goals:
- Make a relatively low threshold for what contracts require a writing.
- Set the requirements for what counts as a sufficient writing.
- Outline the exceptions to the rule.
Buffaloe v. Hart
114 S.E.2d (N.C. App. 1994).
Hart is the defendant, lost and appealed.
Question
Whether the check was a sufficient writing. And whether there was an exception if the check was not a sufficient writing.
Rule
Two rules
§2-201(1) requires that a writing 1) indicates a sale between the parties 2) is signed by the defendant 3) states a quantity.
§2-201(3)(c) requires that the seller must deliver the goods and have them accepted by the buyer. This is a question of fact of part performance which is a jury question.
Holding
There was no error in denying motion for directed judgment notwithstanding the verdict, jury rule stands.
Facts
Plaintiff was previously renting some tobacco barns from the defendants for 2,000 each year. He mentioned to the defendant’s that he was desirous to purchase the barns for 20,000 which would be paid over 4 years with 5,000 dollar installments. The defendants agreed and he began to pay. He also tried to get a loan from the bank for the full 20,000 to pay in full but was unsuccessful. However, because he had agreed to purchase the barns, he still covered insurance, looked for prospective buyers (from him) and handed over the first installment of 5,000 in a check. The defendant accepted the check in person, but did not cash it, sign it, or endorse it. Instead, the defendant returned the check shredded into pieces.
Analysis
Sufficient writing? §2-201(1)
The barns are goods exceeding the UCC requirement of $500, so the statute of frauds apply. The check was not a sufficient writing because it was not endorsed. It would have been sufficient had the defendant endorsed the check, but there was not even the name of the defendant present. So now we ask if the contract met the exceptions.
Exception? §2-201(3)(c)
The plaintiff had told several people about purchasing the barn, reimbursed the defendant’s for the insurance, auctioned the barns, and had deposited from several buyers. He had also delivered a check for $5,000 which wasn’t returned for a few days. Therefore, this is a question of fact as to whether the seller (defendant) delivered goods to the buyer (plaintiff) and it was accepted by the buyer. The jury in this case said it was, so the court affirmed that decision.
Additional Notes
U.C.C. § 2-201
This is not a complete statute of frauds. So, whenever we have this, we will want to see if it applies and then move to the restatements.
Three step analysis
Does the statute of frauds apply? Yes, this is a good, applies under the UCC. This is a good because they are moveable. §2-105. These barns are more like sheds and can be moveable. They are also being sold for more than $500. §2-201(1).
Is the statute of frauds satisfied? No, there was not a sufficient writing. This is because there was no signature from the defendant (the person who the contract was attempting to be enforced against) on the check that was sent. At a minimum, there needs to be a signature from the defendant.
Is there an exception? Yes, there was accepted performance under §2-201(3)(c). Requires delivery by the seller and acceptance by the buyer, and some performance by the buyer. Here, Even though the barns had stayed on the property, ownership had transferred. Acceptance was made by the plaintiff providing repairs to the barns and paying for the insurance on the barns, etc.
Disclaimer
The content contained in this article may contain inaccuracies and is not intended to reflect the opinions, views, beliefs, or practices of any academic professor or publication. Instead, this content is a reflection on the author’s understanding of the law and legal practices.
