New York Business Lawyer Blog

Is there really a simple sales contract in New York? As we pointed out previously, the answer is no. Every business should know that there is always much more to even the simplest sales contract than meets the eye; unspoken promises included.

A simple sales contract, to most people, means nothing more than a contract to buy and sell goods. This does not have to be, and often is not, what most people think of as a full-blown written contract, which sets out in great detail what each party promises to do and is promised to receive in return. That, of course, would be best; but it's not feasible or necessary.

Most sales contracts for the purchase of goods in New York fall under the special set of rules known as the Statute of Frauds, which govern sales of goods worth $500 or more. The only writing that requires is a simple note, memorandum, or correspondence, which states just the type and amount of the goods to be sold. It does not even necessarily have to include the price; oral evidence can be used to fill in the blanks. It can be enforced against the parties who signed the writing. It can be established through partial performance, even without any writing; i.e., if the Buyer accepts delivery of the goods, he can be forced to pay the agreed price for them. Likewise, if the Seller accepts the Buyer's payment, the Seller can be forced to deliver the goods the Buyer has paid for. If between two merchants, the sales contract can be established where one of them sends the other a written confirmation of a contract, which often can be nothing more than an invoice, and the other fails to respond, or object, within ten days. See UCC 2-201.

Even with writings that record only the bare essentials of a sales contract, a New York business that sells goods can be liable for promises that it did not expressly make and are not specifically written anywhere. One, as we previously discussed, is the implied warranty of merchantability.

Continue reading "A Simple Sales Contract in New York (II) - A Story of Few Words" »

Is there really such a thing as a simple sales contract? In New York, at least, the answer is no.

As we previously discussed, a contract does not have to be written in order to be enforced. There can be an implied in fact contract; though it often is easier to prove the existence of a written contract than it is to prove a contract simply by showing that the parties acted like they had entered into a mutually binding agreement.

Most New York business owners place and fill orders for goods all the time. Often they do it just by placing, or receiving, a telephone call, with a purchase order, or at least an invoice, that follows. Most know that if the Buyer, or the Seller, does not keep its end of the bargain, the other could sue it for breach of contract. But what most may not realize is that the Seller also can be responsible for any promises or representations he might make regarding his particular item. Such an unwritten promise, in an unwritten contract, can be a warranty; if the Seller breaks it, he possibly can be liable for breach of warranty and, maybe, even fraud.

There are promises that go along with most sales transactions. For instance, when you buy a car, it often comes with a written warranty; if something breaks in the car within a specified time after you purchase it, the manufacturer often will fix it at little or no cost to you. Sometimes, a car company will voluntarily recall a large number of cars to pre-emptively fix a problem. Recently, for example, according to news reports, Toyota announced a large recall to fix an airbag problem in some of its models..

A warranty does not have to be written to be enforced; sometimes it does not even have to be spoken. A New York business, for instance, that normally sells a particular product, warrants, or promises, even without a writing, that the goods it sells are merchantable. This basically means that if a parts supplier sells widgets, it promises that the widgets it sells are acceptable widgets in the widget trade; that its widgets are of fair average quality as far as widgets go; that its widgets are fit to be used as widgets normally are; that its widgets are basically all of like kind and quality; that its widgets are adequately packaged and labeled as agreed; and that its widgets live up to whatever statements are on the packaging or labeling of the widgets. This is known as the warranty of merchantability. N.Y. U.C.C. Law § 2-314.

Continue reading "Simple New York Sales Contracts - Unspoken Promises Included" »