A business owner operates a retail furniture store and places a verbal order for 300 custom tables from a manufacturer. The tables are to be made with unique specifications provided by the business owner and are priced at $500 each, bringing the total cost to $150,000. The manufacturer begins production but does not complete the order when the business owner cancels it. The manufacturer sues to enforce the contract, but the business owner argues that the contract is unenforceable because it was not in writing. Which of the following is correct about the enforceability of this contract?
The contract is enforceable because verbal agreements over $500 are valid if partial production has commenced.
The contract is unenforceable because the manufacturer had not yet completed production at the time of cancellation.
The contract is unenforceable because it was not in writing as required for goods priced at $500 or more.
The contract is enforceable because the tables are specially manufactured and cannot be resold in the ordinary course of business.
Under the statute of frauds, certain contracts must be in writing to be enforceable, including contracts for the sale of goods priced at $500 or more, as governed by the Uniform Commercial Code (UCC) §2-201. However, there are exceptions to the writing requirement, such as when goods are specially manufactured for a buyer and cannot be sold to others in the ordinary course of the seller's business. In this scenario, the contract is enforceable because the tables were custom-made according to the buyer's specifications, which brings the agreement within this exception. The other answers are incorrect because they fail to account for this statutory exception or misapply the rule.
Ask Bash
Bash is our AI bot, trained to help you pass your exam. AI Generated Content may display inaccurate information, always double-check anything important.
What is the statute of frauds?
Open an interactive chat with Bash
What does the UCC say about specially manufactured goods?