2018 New Mexico Statutes
Chapter 55 - Uniform Commercial Code
Article 2 - Sales
Section 55-2-201 - Formal requirements; statute of frauds.

(1) 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. A writing is not insufficient because it omits or incorrectly states a term agreed upon but the contract is not enforceable under this paragraph beyond the quantity of goods shown in such writing.

(2) Between merchants if within a reasonable time a writing in confirmation of the contract and sufficient against the sender is received and the party receiving it has reason to know its contents, it satisfies the requirements of Subsection (1) against such party unless written notice of objection to its contents is given within ten days after it is received.

(3) A contract which does not satisfy the requirements of Subsection (1) but which is valid in other respects is enforceable:

(a) if the goods are to be specially manufactured for the buyer and are not suitable for sale to others in the ordinary course of the seller's business and the seller, before notice of repudiation is received and under circumstances which reasonably indicate that the goods are for the buyer, has made either a substantial beginning of their manufacture or commitments for their procurement; or

(b) if the party against whom enforcement is sought admits in his pleading, testimony or otherwise in court that a contract for sale was made, but the contract is not enforceable under this provision beyond the quantity of goods admitted; or

(c) with respect to goods for which payment has been made and accepted or which have been received and accepted (Section 2-606 [55-2-606 NMSA 1978]).

History: 1953 Comp., § 50A-2-201, enacted by Laws 1961, ch. 96, § 2-201.

OFFICIAL COMMENTS

UCC Official Comments by ALI & the NCCUSL. Reproduced with permission of the PEB for the UCC. All rights reserved.

Prior uniform statutory provision. — Section 4, Uniform Sales Act (which was based on Section 17 of the Statute of 29 Charles II).

Changes. — Completely rephrased; restricted to sale of goods. See also Sections 1-206, 8-319 and 9-203.

Purposes of changes. — The changed phraseology of this section is intended to make it clear that:

1. The required writing need not contain all the material terms of the contract and such material terms as are stated need not be precisely stated. All that is required is that the writing afford a basis for believing that the offered oral evidence rests on a real transaction. It may be written in lead pencil on a scratch pad. It need not indicate which party is the buyer and which the seller. The only term which must appear is the quantity term which need not be accurately stated but recovery is limited to the amount stated. The price, time and place of payment or delivery, the general quality of the goods, or any particular warranties may all be omitted.

Special emphasis must be placed on the permissibility of omitting the price term in view of the insistence of some courts on the express inclusion of this term even where the parties have contracted on the basis of a published price list. In many valid contracts for sale the parties do not mention the price in express terms, the buyer being bound to pay and the seller to accept a reasonable price which the trier of the fact may well be trusted to determine. Again, frequently the price is not mentioned since the parties have based their agreement on a price list or catalogue known to both of them and this list serves as an efficient safeguard against perjury. Finally, "market" prices and valuations that are current in the vicinity constitute a similar check. Thus if the price is not stated in the memorandum it can normally be supplied without danger of fraud. Of course if the "price" consists of goods rather than money the quantity of goods must be stated.

Only three definite and invariable requirements as to the memorandum are made by this subsection. First, it must evidence a contract for the sale of goods; second, it must be "signed", a word which includes any authentication which identifies the party to be charged; and third, it must specify a quantity.

2. "Partial performance" as a substitute for the required memorandum can validate the contract only for the goods which have been accepted or for which payment has been made and accepted.

Receipt and acceptance either of goods or of the price constitutes an unambiguous overt admission by both parties that a contract actually exists. If the court can make a just apportionment, therefore, the agreed price of any goods actually delivered can be recovered without a writing or, if the price has been paid, the seller can be forced to deliver an apportionable part of the goods. The overt actions of the parties make admissible evidence of the other terms of the contract necessary to a just apportionment. This is true even though the actions of the parties are not in themselves inconsistent with a different transaction such as a consignment for resale or a mere loan of money.

Part performance by the buyer requires the delivery of something by him that is accepted by the seller as such performance. Thus, part payment may be made by money or check, accepted by the seller. If the agreed price consists of goods or services, then they must also have been delivered and accepted.

3. Between merchants, failure to answer a written confirmation of a contract within ten days of receipt is tantamount to a writing under Subsection (2) and is sufficient against both parties under Subsection (1). The only effect, however, is to take away from the party who fails to answer the defense of the statute of frauds; the burden of persuading the trier of fact that a contract was in fact made orally prior to the written confirmation is unaffected. Compare the effect of a failure to reply under Section 2-207.

4. Failure to satisfy the requirements of this section does not render the contract void for all purposes, but merely prevents it from being judicially enforced in favor of a party to the contract. For example, a buyer who takes possession of goods as provided in an oral contract which the seller has not meanwhile repudiated, is not a trespasser. Nor would the statute of frauds provisions of this section be a defense to a third person who wrongfully induces a party to refuse to perform an oral contract, even though the injured party cannot maintain an action for damages against the party so refusing to perform.

5. The requirement of "signing" is discussed in the comment to Section 1-201.

6. It is not necessary that the writing be delivered to anybody. It need not be signed or authenticated by both parties but it is, of course, not sufficient against one who has not signed it. Prior to a dispute no one can determine which party's signing of the memorandum may be necessary but from the time of contracting each party should be aware that to him it is signing by the other which is important.

7. If the making of a contract is admitted in court, either in a written pleading, by stipulation or by oral statement before the court, no additional writing is necessary for protection against fraud. Under this section it is no longer possible to admit the contract in court and still treat the statute as a defense. However, the contract is not thus conclusively established. The admission so made by a party is itself evidential against him of the truth of the facts so admitted and of nothing more; as against the other party, it is not evidential at all.

Cross references. — See Sections 1-201, 2-202, 2-207, 2-209 and 2-304.

"Action". Section 1-201.

"Between merchants". Section 2-104.

"Buyer". Section 2-103.

"Contract". Section 1-201.

"Contract for sale". Section 2-106.

"Goods". Section 2-105.

"Notice". Section 1-201.

"Party". Section 1-201.

"Reasonable time". Section 1-204.

"Sale". Section 2-106.

"Seller". Section 2-103.

Statute of frauds generally. — A promise to discharge a debt, made to a debtor for adequate consideration by one not liable for the existing debt, is not a promise to answer for the debt of another within the meaning of the statute of frauds. Banes Agency v. Chino, 1955-NMSC-100, 60 N.M. 297, 291 P.2d 328 (decided under former law).

Terms of written contract may carry over into substantially identical oral contract. — Where, after a written contract is terminated, an oral contract is entered into, and where there is a course of dealing for a number of years under the oral contract, which is identical in all respects other than to whom payment would be made, the provisions of which are fully known to and understood by the buyer, who has the obligation to give timely notice or waive any and all claims, the terms of the written contract carry over into the oral arrangement. Bowlin's, Inc. v. Ramsey Oil Co., 1983-NMCA-038, 99 N.M. 660, 662 P.2d 661, cert. denied, 99 N.M. 644, 662 P.2d 645.

There was no enforceable contract between rancher and feedlot operator for the outright purchase of cattle, in the absence of a written agreement as mandated by this section, where the terms of the agreement provided for the transportation of cattle to feed yard, and feed yard's oversight, care and attempt to sell them. Production Credit Ass'n v. Alamo Ranch Co., 989 F.2d 413 (10th Cir. 1993).

Law reviews. — For article, "Buyers and Sellers of Goods in Bankruptcy," see 1 N.M. L. Rev. 435 (1971).

For annual survey of commercial law in New Mexico, see 18 N.M.L. Rev. 313 (1988).

Am. Jur. 2d, A.L.R. and C.J.S. references. — 15A Am. Jur. 2d Commercial Code §§ 29, 115; 67 Am. Jur. 2d Sales §§ 30, 102 to 139, 180 to 207; 72 Am. Jur. 2d Statute of Frauds §§ 129 to 131, 138, 140, 143, 146, 147, 285, 295, 301, 340, 342, 343, 366; 73 Am. Jur. 2d Statute of Frauds §§ 513, 574, 589.

Contract for sale of goods as entire or divisible, 2 A.L.R. 643.

When goods remaining in custody of seller or some third person deemed received by buyer within exception to statute, 4 A.L.R. 902.

Divisibility of contract for the sale of an outfit, plant or machinery, 4 A.L.R. 1442.

Trade custom or usage to explain or supply essential terms in writing required by statute of frauds (or Sales Act) in sale of goods, 29 A.L.R. 1218.

Mutuality and enforceability of an agreement upon the sale of goods, to give the purchaser an option or the exclusive sale of similar goods without a corresponding obligation on his part, 45 A.L.R. 1197.

Oral contract to enter into written contract as within statute of frauds, 58 A.L.R. 1015.

Contracts relating to corporate stock as within provisions of statute of frauds dealing with sales of goods, etc., 59 A.L.R. 597.

Doctrine of part performance as sustaining action at law based on contract within statute of frauds, 59 A.L.R. 1305.

Necessity and sufficiency of statement in writing of consideration or price for sale of goods or choses in action in order to satisfy statute of frauds, 59 A.L.R. 1422.

Sufficiency of identification of vendor or purchaser in memorandum, 70 A.L.R. 196.

Failure to comply with statute of frauds as to part of a contract within the statute as affecting the enforceability of another part not covered by the statute, 71 A.L.R. 479.

Reformation of memorandum relied upon to take an oral contract out of the statute of frauds, 73 A.L.R. 99.

Extrinsic writing referred to in written agreement as part thereof for purposes of statute of frauds, 73 A.L.R. 1383.

Effect of statute of frauds on right to modify by parol agreement required to be in writing, 80 A.L.R. 539, 118 A.L.R. 1511.

Necessity that each of several papers constituting contract be signed by party to be charged, 85 A.L.R. 1184.

Admission of contract by defendant as affecting sufficiency of acts relied on to constitute part performance under statute of frauds, 90 A.L.R. 231.

Dealings between seller and buyer after latter's knowledge of former's fraud as waiver of claim for damages on account of fraud, 106 A.L.R. 172.

Construction and application of Uniform Sales Act, other than Section 4 relating to statute of frauds, as regards distinction between contract of sale and contract for work or labor, 111 A.L.R. 341.

Acceptance satisfying statute where purchaser in possession at time of sale, 111 A.L.R. 1312.

Writing between one of the parties to a contract and his agent or a third person as satisfying statute of frauds, 112 A.L.R. 490.

Place of signature on memorandum to satisfy statute of frauds, 112 A.L.R. 937.

Acceptance which will take oral sale or contract for sale out of statute of frauds as affected by cancellation of order or repudiation of contract before goods were shipped or delivered to buyer, 113 A.L.R. 810.

Relation between doctrines of estoppel and part performance as basis of enforcement of contract not conforming to the statute of frauds, 117 A.L.R. 939.

Statute of frauds as applied to agreements of repurchase or repayment on sale of corporate stock or other personal property, 121 A.L.R. 312.

Public record as satisfying requirement of statute of frauds as to written contract or memorandum, 127 A.L.R. 236.

Terms "bags," "bales," "cars" or other terms indefinite as to quantity or weight as satisfying statute of frauds, 129 A.L.R. 1230.

Money in possession of seller before contract was made as part payment, 131 A.L.R. 1252, 170 A.L.R. 245.

Check or note as memorandum satisfying statute of frauds, 153 A.L.R. 1112.

Contract to fill in land as one for sale of goods within statute of frauds, 161 A.L.R. 1158.

Printed, stamped or typewritten name as satisfying requirement of statute of frauds as regards signature, 171 A.L.R. 334.

Performance as taking contract not to be performed within a year out of the statute of frauds, 6 A.L.R.2d 1053.

Check as payment within contemplation of statute of frauds, 8 A.L.R.2d 251.

Sale of contractual rights; defect in written record as ground for avoiding sale, 10 A.L.R.2d 728.

Undelivered lease or contract (other than for sale of land), or undelivered memorandum thereof, as satisfying statute of frauds, 12 A.L.R.2d 508.

Agency to purchase personal property for another as within statute of frauds, 20 A.L.R.2d 1140.

Construction and effect of exception making the statute of frauds provision inapplicable where goods are manufactured by seller for buyer, 25 A.L.R.2d 672.

Construction and effect of contract for sale of commodity to fill buyer's requirements, 26 A.L.R.2d 1099.

Statute of frauds as applicable to seller's oral warranty as to quality or condition of chattel, 40 A.L.R.2d 760.

Recovery, on theory of quasi contract, unjust enrichment or restitution, of money paid in reliance upon unenforceable promise to accept a bill of exchange or draft, 81 A.L.R.2d 587.

Buyer's note as payment within contemplation of statute of frauds, 81 A.L.R.2d 1355.

Contract which violates statute of frauds as evidence of value in action not based on the contract, 21 A.L.R.3d 9.

Statute of frauds and conflict of laws, 47 A.L.R.3d 137.

Construction and application of U.C.C. § 2-201(3)(b) rendering contract of sale enforceable notwithstanding statute of frauds, to extent it is admitted in pleading, testimony, or otherwise in court, 88 A.L.R.3d 416.

Liability for interference with invalid or unenforceable contract, 96 A.L.R.3d 1294.

Construction and application of UCC § 2-201(3)(c) rendering contract of sale enforceable notwithstanding statute of frauds with respect to goods for which payment has been made and accepted or which have been received and accepted, 97 A.L.R.3d 908.

Promissory estoppel as basis for avoidance of U.C.C. statute of frauds (U.C.C. § 2-201), 29 A.L.R.4th 1006.

Sales: "specially manufactured goods" statute of frauds exception in UCC § 2-201(3)(a), 45 A.L.R.4th 1126.

Sales: construction of statute of frauds exception under UCC § 2-201(2) for confirmatory writing between merchants, 82 A.L.R.4th 709.

37 C.J.S. Frauds, Statute of § 138.