1. LAW FOR BUSINESS AND PERSONAL USE © SOUTH-WESTERN PUBLISHING Chapter 15 Slide 1 Special Rules for Sales Contracts Explain the need for the statute of frauds Discuss the instances in which the statute of frauds will be applied LESSON 15-3 GOALS

2. LAW FOR BUSINESS AND PERSONAL USE © SOUTH-WESTERN PUBLISHING Chapter 15Slide 2 STATUTE OF FRAUDS (#1) Not all the terms of a sales contract have to be in writing; all that is required is a writing, signed by the party being sued, which satisfied the court that a contract to sell, or a sale, has been made. (#1) The quantity of goods must be contained in the writing.

3. LAW FOR BUSINESS AND PERSONAL USE © SOUTH-WESTERN PUBLISHING Chapter 15Slide 3 STATUTE OF FRAUDS (#3) The statute of frauds provides the framework for the enforcement of contracts for sales of goods for $500 or more. (#3) It provides for the injured party to sue for damages and the written contract goes a long way toward proving the existence and terms of the agreement. (#3) Parties that sign the written contract can be sued.

4. LAW FOR BUSINESS AND PERSONAL USE © SOUTH-WESTERN PUBLISHING Chapter 15Slide 4 WHAT’S YOUR VERDICT? Is Chilton liable to Open Shutter for breach of contract?

5. LAW FOR BUSINESS AND PERSONAL USE © SOUTH-WESTERN PUBLISHING Chapter 15Slide 5 WHEN IS A SIGNED WRITING NOT REQUIRED UNDER THE STATUTE? Under the UCC a buyer can accept goods in three ways. (#2) After a reasonable opportunity to inspect the goods, the buyer signifies to the seller that the goods conform to the contract or will be retained in spite of their nonconformity. The buyer acts inconsistently with the seller’s ownership, buy using the goods for example. The buyer fails to make an effective rejection after having a reasonable opportunity to inspect the goods.

6. LAW FOR BUSINESS AND PERSONAL USE © SOUTH-WESTERN PUBLISHING Chapter 15Slide 6 (#4) Discuss the instances in which the statute of frauds will be applied. The statute of frauds applies to contracts for the sales of goods for $500 or more evidenced by a writing and generally requires a signature of the party being sued. Between merchants, the signature of the party suing may be sufficient. Oral contracts for such sales may be valid and enforceable if: the goods are received and accepted by the buyer, if the buyer pays and the seller accepts payment, if the goods are specially made and not suitable for sale to others, or if the party admits that an oral contract was made.

7. LAW FOR BUSINESS AND PERSONAL USE © SOUTH-WESTERN PUBLISHING Chapter 15Slide 7 WHAT’S YOUR VERDICT? Who should win?