Question

Webstar Corp. orally agreed to sell Northco, Inc., a computer for $20,000. Northco sent a signed purchase order to Webstar confirming the agreement. Webstar received the purchase order and did not respond. Webstar refused to deliver the computer to Northco, claiming that the purchase order did not satisfy the UCC Statute of Frauds because it was not signed by Webstar. Northco sells computers to the general public and Webstar is a computer wholesaler. Under the UCC Sales Article, Webstar's position is

A. Incorrect because it failed to object to Northco's purchase order.
B. Incorrect because only the buyer in a sale-of-goods transaction must sign the contract.
C. Correct because the purchase price of the computer exceeded $500.
D. Correct because it was the party against whom enforcement of the contract is being sought.

Answer 1

Webstar Corp.'s position is incorrect under the UCC because it did not object to Northco's signed purchase order within 10 days, and the Statute of Frauds requirement is satisfied between merchants without Webstar's signature.

Step-by-step explanation:

The question is about whether Webstar Corp.'s position is correct under the Uniform Commercial Code (UCC) regarding the requirement for contracts for the sale of goods over $500 to be in writing. According to the UCC Statute of Frauds, contracts for the sale of goods priced at $500 or more must be in writing to be enforceable. However, an exception applies when a confirmation between merchants is involved. If a merchant receives a written confirmation of an oral agreement, fails to object in writing within 10 days, and the recipient is a merchant, the confirmation is valid and enforceable against the merchant who received it even if it is not signed by the sender. Therefore, Webstar Corp.'s position is incorrect because it failed to object to Northco's purchase order, and as a wholesaler dealing with another merchant, the Statute of Frauds requirement has been satisfied by the signed purchase order from Northco.