UCC Article 2’s Statute of Frauds (RCW 62A.2-201)

Part 2: Statute of Frauds – General Rule

Todd J. Cook, Edmonds Lawyer

Continuing our series on UCC Article 2, this post asks, “what contracts for the sale of goods must be in writing, and why?” While many non-lawyers believe contracts must be in writing to be enforceable, that is not always the case. Rather, a series of laws that we refer to as the “Statute of Frauds” governs when a contract must be in writing.  With respect to the sale of goods, the Statute of Frauds is codified at RCW 62A.2-201.

Article 2’s Statute of Frauds establishes a general rule that contracts for the sale of goods for the price of $500 or more must be in writing to be enforceable. See RCW 62A.2-201(1) (“a contract for the sale of goods for the price of five hundred dollars 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 or her authorized agent or broker”).  

In simple terms, this means that if you buy a textbook from a friend for $100, the contract need not be written for it to be enforceable.  Conversely, if that same textbook is purchased for $500, the contract must be written for it to be enforceable.

Four Exceptions to the General Rule

Article 2’s Statute of Frauds provides four exceptions to its general rule. The drafters of Article 2 rationalized these exceptions because the underlying facts surrounding each exception satisfy the same primary functions of a written contract by supplying evidence of the contract’s existence and terms.

The Merchant Exception

RCW 62A.2-201(2) provides, “[b]etween 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) of this section against such party unless written notice of objection to its contents is given within ten days after it is received.”

This exception only applies to transactions “[b]etween merchants.” “Merchant” is a defined term used throughout Article 2 to refer to:

a person who deals in goods of the kind or otherwise by his or her occupation holds himself or herself out as having knowledge or skill peculiar to the practices or goods involved in the transaction or to whom such knowledge or skill may be attributed by his or her employment of an agent or broker or other intermediary who by his or her occupation holds himself or herself out as having such knowledge or skill.

RCW 62A.2-104(1).

A transaction “[b]etween merchants” is “any transaction with respect to which both parties are chargeable with the knowledge or skill of merchants.”  RCW 62A.2-104(3). Keep these definitions in mind as they will be critical as we continue this blog series.

Unwritten contracts between merchants for the sale of goods for $500 or more are enforceable if (i) one of the merchants sends the other a written confirmation of the sale within a “reasonable time” and (ii) the merchant receiving the written confirmation fails to object within ten days of receiving the written confirmation.

This exception allows merchants to enter into enforceable oral agreements for the sale of goods exceeding $500 so long as the parties timely comply with RCW 62A.2-201(2)’s written confirmation requirements after entering the contract.

The Specially Manufactured Goods Exception

RCW 62A.2-201(3)(a) provides another exception, “[i]f 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.”

Essentially, if (1) a seller is manufacturing custom goods specifically for the buyer; (2) such goods could not be sold to anyone else but that buyer; (3) repudiation has not yet occurred; and (4) the seller has begun the manufacture of the buyer’s goods, the unwritten contract for the sale of goods for $500 or more will be enforceable.  

For example, if a buyer orally contracts with a woodworker for the crafting of a $1,000 9-leg chair engraved with the buyer’s name and family crest for their eclectic mountain home, and the woodworker begins to create the chair, it is highly likely that the oral contract will remain enforceable because the woodworker would likely be unable to sell the custom product to anyone other than the buyer specifically requesting its manufacture.

The Admission in Court Exception

Under RCW 62A.2-201(3)(b), a contract that does not comply with the general rule of the Statute of Limitations will be enforceable “if the party against whom enforcement is sought admits in his or her 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.”

This exception is different from the rest because it provides a mechanism for a contract to become enforceable (at least in part) during the process of legally enforcing an otherwise non-enforceable contract.

For example, let’s assume that a hotel owner orally contracts to purchase 1,000 bars of soap for $2,000, but when the manufacturer is ready to deliver, the hotel owner refuses delivery and fails to pay.  Although the contract does not comply with the general rule in RCW 62A.2-201(1) and no other exception applies, the manufacturer sues the hotel owner for breach of contract.  Finally, when answering the Complaint, the hotel owner admits that she agreed to purchase 750 bars of soap.  Under this scenario, based on the hotel owner’s judicial admission, the manufacturer will now have an enforceable contract for the sale of 750 bars of soap under RCW 62A.2-201(b)(3).  If the price term is missing from the admission, other contract terms such as price will be supplemented by Article 2. See RCW 62A.2-305.

Acceptance of Payment and/or Goods Exception

Finally, RCW 62A.2-201(3)(c) creates exceptions to the general Statute of Frauds rule with respect to “goods for which payment has been made and accepted or which have been received and accepted (RCW 62A.2-606).”

For example, if that same hotel owner submits payment to the soap seller, and the seller deposits such payment, the unwritten contract will become enforceable. In that same vein, if the soap seller delivers the 1,000 bars of soap to the hotel owner, and the hotel owner fails to pay for the soap but nevertheless accepts the goods (“acceptance” of goods is an important concept under Article 2 and will be explored in a later post in this series), the unwritten contract will become enforceable.


While written contracts are not always necessary, even under the Statute of Frauds, many disputes can be resolved more efficiently, or circumvented altogether, through the investment in a written contract at the onset. If you transact in the sale of goods, even if you think an exception to the Statute of Frauds may apply, you should consider reducing your agreements to writing.

To learn more about UCC Article 2, written contracts, or any of the exceptions thereto, please contact Beresford Booth at info@beresfordlaw.com or by phone at (425) 776-4100.

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