Final answer:
The confirmatory memo rule allows a written confirmation of an oral sales agreement to bind the parties to its terms, under the UCC, by providing a means to satisfy the Statute of Frauds.
Step-by-step explanation:
Under the confirmatory memo rule, a written confirmation sent from one party to the other confirming the terms of their oral sales agreement will bind the parties to the terms outlined in the memo, assuming certain conditions are met.This rule is embodied in Section 2-201 of the Uniform Commercial Code (UCC), often referred to as the Statute of Frauds provision for the sale of goods. If an oral agreement is made concerning the sale of goods valued at $500 or more, a written confirmation sent to the party who has not signed a written contract within a reasonable time can suffice to satisfy the Statute of Frauds requirement.
The recipient of such a confirmation must object to its contents in writing within ten days; otherwise, the terms of the confirmation will become part of the enforceable agreement between the parties, even if the confirmation is unilateral.This is significant in legal terms because it allows an oral agreement that would normally fall under the Statute of Frauds to be enforceable by providing evidence of the agreement through a written confirmation. It emphasizes the importance of prompt communication in case there are discrepancies in the understanding of the agreement's terms.