Contracts sample analysis
MBE Contracts UCC Merchant Modification Fact Pattern + Analysis
Review a fresh MBE UCC merchant-modification problem with Statute of Frauds analysis, common traps, and a short quiz teaser.
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Fact pattern
North Harbor Kitchens, a restaurant supplier, signed a written contract to sell 30 stainless prep tables to Elm Street Market for $900 each. The signed writing also said, "No modification is effective unless signed by both parties." Two weeks later, Elm Street called and asked North Harbor to deliver 36 tables instead and to push delivery back by one month. North Harbor agreed over the phone and then shipped 36 tables on the later date. Elm Street accepted all 36 tables but later refused to pay for the extra 6, arguing that the oral modification was unenforceable.
Quick answer
North Harbor can recover for the extra six tables because Elm Street accepted the modified performance, waiving the signed-modification requirement as to the goods received. Under UCC Article 2, an agreement modifying a contract for the sale of goods needs no consideration to be binding. But a signed contract between merchants may require that modifications be in a signed writing. In addition, a modification must satisfy the Statute of Frauds if the contract as modified falls within UCC Section 2-201. Even so, an otherwise unenforceable oral modification can become effective through waiver or by performance accepted by the other side.
IRAC analysis
Can North Harbor enforce the change from 30 tables to 36 tables even though the modification was never signed?
Under UCC Article 2, an agreement modifying a contract for the sale of goods needs no consideration to be binding. But a signed contract between merchants may require that modifications be in a signed writing. In addition, a modification must satisfy the Statute of Frauds if the contract as modified falls within UCC Section 2-201. Even so, an otherwise unenforceable oral modification can become effective through waiver or by performance accepted by the other side.
The original agreement is a sale of goods between merchants, so UCC rules apply. The phone call changing quantity and delivery did not need fresh consideration because Article 2 rejects the common-law preexisting-duty requirement for ordinary contract modifications…
Primary law and source anchors
- UCC Section 2-209(1) A contract for the sale of goods may be modified without consideration.
- UCC Section 2-209(2) A signed agreement excluding modification except by signed writing is generally enforceable between merchants.
- UCC Section 2-209(4) and (5) An ineffective attempt at modification may still operate as a waiver, and waiver can sometimes be retracted.
- UCC Section 2-201 The Statute of Frauds applies to contracts for the sale of goods priced at $500 or more.