Sean of Sean's Shrimp House was enjoying a cup of cappuccino while visiting with Ollie at Ollie's Ocean Front Bar & Grill. During the course of their conversation, Sean agreed to supply 100 pounds of shrimp per month for the next year to Ollie's restaurant at the price of $2.50 per pound. When Sean got back to his office, he sent a written confirmation of the agreement to Ollie. Six weeks after receiving the confirmation Ollie wrote back, stating that he had not agreed to the price of $2.50 per pound. Is Ollie bound to the confirmation?

Question

What will be an ideal response?

Answer 1

Probably. Shrimp is a "good," and therefore this contract is governed by Article 2 of the UCC. The Statute of Frauds requires agreements for the sale of goods with a purchase price $500 or more to be in writing with the defendant's signature. If Sean sues Ollie under the general provisions of the Statute of Frauds, Sean would not be able to satisfy the signature requirement without Ollie's signature on the letter of confirmation. However, when both parties are merchants entering into an oral contract, and one sends a confirming memo to the other within a reasonable time, and the memo is sufficient to bind the sender, then UCC, Section 2-201 provides that the memo is also valid against the merchant who receives it, unless he/she objects to the memo within ten days. Here, both parties are merchants. If Ollie's recollection of the conversation was not accurately recorded in the confirming memo, Ollie should have refuted the memo within tendays. Six weeks is an unreasonable time to wait to respond.