REG · Business Law · 6 practice questions
UCC Statute of Frauds: The $500 Writing Requirement
A sale of goods for $500 or more generally needs a signed writing unless an exception applies. Below, sort variations of Apex's chair purchase by whether a writing or accepted payment makes it enforceable.
Try one first
Hint
First identify whether this is governed by common law or the UCC, then ask whether a dollar threshold triggers a writing requirement.
Answer C. This is a sale of goods governed by the UCC and the total price is $1,200, which exceeds the UCC Statute of Frauds threshold. Absent an applicable exception, a contract for the sale of goods for $500 or more is generally not enforceable without a sufficient signed writing. The stem explicitly says no exception applies, so the oral agreement is generally unenforceable.
Why not A: This choice confuses the common-law one-year Statute of Frauds rule with the sale-of-goods rule; because this is a goods sale governed by the UCC, the $500 writing requirement controls even though performance (delivery) is scheduled within a year.
Why not B: This distractor misstates the law; the UCC writing requirement for goods priced at $500 or more applies regardless of whether the parties are merchants. Merchant-specific rules affect certain exceptions (e.g., the confirmatory memo), but they do not limit the basic UCC Statute of Frauds.
Why not D: This overgeneralizes the Statute of Frauds; oral goods contracts are not automatically void, many are enforceable (for example, under $500 or with an applicable exception), but here the price exceeds the $500 threshold and no exception applies.
Sort it
The total is at least $500, but there is neither a sufficient seller-signed writing nor an exception.
A sale record states all 20 chairs and bears the seller's signature.
The total is below $500, or the seller accepted payment for all 20 chairs.
The signed quantity or accepted payment covers fewer than all 20 chairs.
| Item | Goes to |
|---|---|
| Apex orally orders 20 standard office chairs for $1,200, due next month, and seeks enforcement against the seller. Neither party signs a writing. No payment or delivery occurs. Assume no exception applies unless stated. | Writing requirement unmetThe $1,200 total triggers the rule. Delivery next month does not avoid it. |
| Same facts, except the total price for the 20 chairs is $400. | No writing neededThe entire sale is below $500, so the UCC writing requirement does not apply. |
| Same facts, except the seller signs a sale memo listing 20 chairs and the $1,200 total. | Sufficient writingThe memo indicates a sale, states the full quantity, and bears the seller's signature. |
| Same facts, except the seller accepts $600 as full payment for 10 specified chairs. | Only part enforceableAccepted payment makes the sale enforceable for those 10 chairs, not the unpaid remainder. |
| Same facts, except the seller signs a sale memo stating $1,200 but no chair quantity. | Writing requirement unmetA signature and price do not cure the missing quantity term. |
| Same facts, except the total price for the 20 chairs is exactly $500. | Writing requirement unmetThe threshold includes exactly $500. No sufficient writing or exception is present. |
| Same facts, except the seller accepts the full $1,200 payment for all 20 chairs. | No writing neededAccepted payment covers the entire order, so the payment exception permits enforcement without a writing. |
| Same facts, except Apex alone signs a sale memo stating 20 chairs. | Writing requirement unmetApex seeks enforcement against the seller, but the seller did not sign. |
| Same facts, except the seller signs a sale memo listing only 10 chairs. | Only part enforceableEnforcement against the seller cannot exceed the 10 chairs stated in the signed writing. |
| Same facts, except Apex mails a $1,200 check that the seller neither accepts nor cashes. | Writing requirement unmetSending payment is not enough. The seller must accept it for the payment exception to apply. |
| Same facts, except the seller signs a sale memo stating 20 chairs but no price. | Sufficient writingThe memo indicates a sale and states quantity. Omitting price does not defeat the writing. |
Key points
- Remember: The $500 test uses the whole sale, but enforcement reaches only the quantity covered by writing or accepted payment.
- Apex needs the seller's signature to enforce against the seller. Apex's own signature is not enough.
- A goods writing can omit price, but it must state quantity.
- Mailing a check is not accepted payment.
How the exam traps you
- Delivery next month means the oral sale is enforceable. Fast delivery does not defeat the $500 goods rule.
- Any signed note is enough. Check the quantity and the signature of the party being sued.
- Payment for some chairs validates the entire order. Accepted payment covers only the chairs paid for.
Question 2
Hint
Ask which choice falls into a classic statute-of-frauds category even though the other choices stay below common time or dollar triggers.
Answer A. This is a collateral promise to answer for the debt of another (a suretyship), which generally falls within the statute of frauds and must be in writing. The stem expressly disclaims a personal or main-business purpose, so the main-purpose (leading-object) exception does not apply; therefore this oral promise is unenforceable absent a writing.
Why not B: Candidates may mistake the large dollar amount for an SOF trigger, but the one-year rule focuses on whether performance can be completed within one year. A 10-month services contract is generally outside the statute of frauds.
Why not C: The UCC statute of frauds applies to goods priced $500 or more. Because this sale is only $400, it typically does not require a writing under the UCC SOF.
Why not D: Although real estate transactions often require writings, a lease that does not exceed one year ordinarily falls outside the statute-of-frauds requirement. An 11-month lease is typically enforceable without a writing.
Question 3
Hint
Analyze the one-year provision from the date the oral agreement was made, and separate possible full performance from what the parties predicted or what later occurred.
Answer B. Under the common-law one-year Statute of Frauds rule, the controlling inquiry is whether the contract, as written when made, could possibly be fully performed within one year. Here the contract could terminate upon the first commercial shipment and shipment within 9 months was possible under the terms, so full performance could occur within one year. Thus the one-year provision does not automatically render the oral agreement unenforceable.
Why not A: Tempting because the parties expected ~14 months, but expectation or probability does not control the one-year rule; courts ask whether performance was possible within one year as of formation, not how likely it was.
Why not C: What later happened (cancellation after formation) is not the focus; the analysis is made at formation based on the contract terms, and ending the project early is not the same as complete performance under the agreement.
Why not D: An outside limit beyond one year (18 months) is relevant but not controlling if the contract could still be fully performed earlier; the possibility of earlier completion governs the one-year inquiry.
Question 4
Hint
Sort each option by the main Statute of Frauds categories: land, goods above the UCC threshold, and agreements that cannot be fully performed within one year.
Answer D. A 10-month service contract can be fully performed within one year from the date of contracting, so it generally does not fall within the Statute of Frauds and may be enforceable orally. By contrast, contracts for the sale of land and contracts for the sale of goods priced at $500 or more (under the UCC) ordinarily require a writing, and a promise that cannot be fully performed within one year (an 18-month services agreement) also usually must be in writing.
Why not A: Tempting because performance is imminent, but transfers of real property fall within the Statute of Frauds and generally require a written contract regardless of how soon closing is scheduled.
Why not B: Appeals to routine business practice, but under the UCC a contract for the sale of goods for $500 or more generally must be evidenced by a writing (unless an applicable exception applies), so an oral $2,000 sale would not be enforceable here.
Why not C: Looks like a service contract, but because performance cannot be completed within one year from the date of contracting, the one-year provision of the Statute of Frauds typically requires a writing for such an agreement.
Question 5
Hint
Focus on whether the contract, by its own terms, can be fully performed within one year from the date the agreement is made.
Answer B. Under the one-year provision, only contracts that by their terms cannot possibly be fully performed within one year from formation fall within the statute of frauds. Option B is measured by completion of an event and contains no minimum term, so full performance could occur within one year even if the parties expect it to take longer. Therefore no writing is required on the one-year ground.
Why not A: This is tempting because it states a definite longer term, but a 14-month term beginning at formation cannot be completed within one year from the contract date, so it falls within the one-year statute and would require a writing.
Why not C: This distractor exploits timing: the one-year period runs from contract formation. Because performance begins 45 days later and then lasts 12 months, full performance would end beyond one year from formation, so a writing would be required.
Why not D: Although early termination for breach might shorten actual performance, the contract by its terms requires 13 months unless a breach occurs. Because the stated term exceeds one year, it cannot be fully performed within one year by its own terms and therefore generally falls within the statute.
Question 6
Hint
Separate goods contracts from service or employment contracts, and pay close attention to whether a stated dollar threshold or the one-year rule applies.
Answer C. Under UCC Article 2, a contract for the sale of goods for $500 or more is generally within the statute of frauds and must be evidenced by a writing to be enforceable, absent an applicable exception. Office furniture is a sale of goods and the stated price of $1,200 exceeds the $500 threshold, so this oral agreement would generally require a writing.
Why not A: The one-year provision of the statute of frauds applies only when performance is impossible within one year from formation. Because this bookkeeping contract can be completed within 10 months, it is not within the one-year rule and generally need not be in writing.
Why not B: This is a sale of goods, but the UCC's usual statute-of-frauds threshold is $500. At $400, the contract falls below that amount and generally does not require a writing under the UCC.
Why not D: An at-will employment agreement is terminable at any time and therefore is capable of being fully performed within one year; it does not typically fall within the one-year statute-of-frauds provision requiring a writing.
Common questions
Does the UCC Statute of Frauds apply at exactly $500?
Yes. The threshold is $500 or more for the total sale, so Apex's $500 variation requires a sufficient writing or an exception.
What must a UCC Statute of Frauds writing contain?
It must indicate a sale, state quantity, and be signed by the party against whom enforcement is sought. Apex needs the seller's signature; a missing price does not defeat an otherwise sufficient writing.
Does partial payment satisfy the UCC Statute of Frauds?
Only to the extent payment is made and accepted. If the seller accepts $600 as full payment for 10 chairs, Apex can enforce that portion without a writing, not the entire 20-chair order.
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