UCC contract law – Filbert’s Meat Shop, LLC shipped to Sonic Taco

Using IRAC – address the following,(Contract law) questions Filbert’s Meat Shop, LLC shipped to Sonic Taco, a company based in Yuma, Arizona, an order of chorizo and machaca beef. That same day, Filbert’s mailed an invoice for the order for $11,000, based on the understanding that an oral contract existed between the parties, whereby Sonic Taco had agreed to pay for the meat. Sonic Taco was engaged in the real estate business at this time and had earlier been approached by Filbert’s Meat to discuss that company’s real estate investment potential. Sonic Taco denied ever guaranteeing payment for the meat and raised the Uniform Commercial Codes Statute of Frauds, Section 2-201, as an affirmative defense. Filbert’s Meat Shop contended that because Sonic Taco was in the business of buying and selling real estate, they possessed knowledge or skill peculiar to the practices involved in the transaction here. After hearing the evidence, the court concluded as a matter of law that Sonic Taco did agree to pay for the meat and was liable to Filbert’s Meat Shop in the amount of $11,000. Sonic Taco appealed.Is this a case governed by the UCC? If it was under common law, is the result different than the UCC? How should the appeals court rule? Support with 1 peer reviewed source

Filbert’s Meat Shop, LLC vs. Sonic Taco

Issue

The issue is whether the case between Filbert’s Meat Shop and Sonic Taco is governed by the U.C.C., and whether the results would be different under common law.

Rule

The Uniform Commercial Code (U.C.C) governs all commercial contracts in the United States. It applies to all cases involving the sale of goods (movable items) where one or both parties are merchants (Woodhull, 2014). In section 2-201 of the U.C.C, the statute of fraud states, “Except as otherwise provided in this section a contract for the sale of goods for the price of $500 or more is not enforceable by way of action or defense unless there is some writing sufficient to indicate that a contract for sale has been made between the parties and signed by the party against whom enforcement is sought or by his authorized agent or broker” (Hofman, 2017, p. 2). Under common law, a contract is enforceable if there is an offer, an acceptance, a consideration, the intention to create legal relations, legality, and capacity.

Application

The case between Filbert’s Meat Shop and Sonic Taco is governed by the U.C.C. Firstly, it involves the sale of movable goods (Filbert shipped an order of chorizo and machaca beef to Sonic Taco). Secondly, Sonic Taco is a merchant in real estate, and Filbert Meat Shop is a merchant in the meat industry. Under U.C.C, contracts involving the sale of goods amounting to $500 or more require a writing agreement to be enforceable. Therefore, U.C.C would render the contract unenforceable because the amount is $11,000, and there was no writing.

If the case were under common law, the result would not be different because the court would consider the essential elements of a valid contract. Among the elements of a contract under common law include a valid offer and an acceptance. Both were missing in the agreement. There was no acceptance from Sonic Taco because, in common law, the offeror must give the offeree a chance to accept or reject the offer. The earlier discussion between the two had no quote for the price or amount of meat to be delivered, so Sonic Taco was under no obligation to pay for an unspecified amount of meat.

Conclusion

Under U.C.C, the contract is unenforceable because the amount involved exceeds the threshold above which a writing agreement is required between the merchants. Under common law, the contract is still unenforceable because there is no valid acceptance from Sonic Taco. The Appeals Court should rule in favor of Sonic Taco because Filbert’s Meat had not provided the offeree a chance to reject or accept the offer containing the amount and price of the goods. Additionally, the oral agreement does not apply in U.C.C for the specified amount of meat costing $11,000, which is above the threshold that requires writing an agreement between the buyer and the seller.

References

Hofman, D. L. (2017). Legally Speaking: Smart Contracts, Archival Bonds, and Linked Data in the Blockchain. 2017 26th International Conference on Computer Communication and Networks (ICCCN). https://doi.org/10.1109/icccn.2017.8038515

Woodhull, S. (2014). The Uniform Commercial Code, Article 2: Introduction and Comparison with the CISG. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.2465362