Okla. Stat. tit. 12A § 2-201

Current through Laws 2024, c. 453.

Section 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 Five Hundred Dollars ($500.00) or more is not enforceable by way of action or defense unless there is a record 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 the party's authorized agent or broker. A record 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 the record.

(2) Between merchants if within a reasonable time a record 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 the party unless notice in a record of objection to its contents is given within ten (10) 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).

Okla. Stat. tit. 12A, § 2-201

Amended by Laws 2024 , c. 13, s. 7, eff. 11/1/2024.

Laws 1961, p. 77, § 2-201.

Oklahoma Code Comment

Prior Statutory Provisions:

15 O.S. §136(4).

Text and derivation of prior provisions, see Appendix at end of this title.

Comment:

(1) The previous Oklahoma statute 15 O.S. § 136(4), now repealed, provided: "The following contracts are invalid, unless the same, or some note or memorandum thereof, be in writing and subscribed by the party to be charged, or by his agent: (4) An agreement for the sale of goods, chattels, or things in action, at a price not less than fifty dollars, unless the buyer accept or receive part of such goods and chattels, or the evidences or some of them, of such things in action, or pay at the same time some part of the purchase money; but when a sale is made by auction, an entry by the auctioneer in his sale book, at the time of the sale, of the kind of property sold, the terms of sale, the price and the names of the purchaser and the person on whose account the sale was made, is a sufficient memorandum."

The Commercial Code changes the previous Oklahoma law in several important respects:

The value of the goods is raised from $50 to $500.

The previous Oklahoma statute included "things in action," but the Commercial Code includes only "goods," which, by definition [12A O.S. § 2-105] excludes things in action. The statute of frauds for things in action is stated in 12A O.S. § 1-206 in which the value must be in excess of $5,000.

The previous Oklahoma statute included specific provisions governing auction sales, but the Commercial Code makes no distinction between auctions and ordinary sales.

The previous Oklahoma statute required "some note or memorandum thereof, be in writing and subscribed by the party to be charged, or by his agent." The Commercial Code reads "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."

Memorandum: Under the previous Oklahoma statute, the memorandum need not be on a single piece of paper, but could consist of letters, telegrams and the like in which there was an internal reference. Irvine v. Haniotes, 208 Okl. 1, 252 P.2d 470 (1953). It is clear that the language of the Commercial Code "some writing sufficient to indicate" that a contract has been made reaches the same result. It is, therefore, doubtful that the Commercial Code materially changes the Oklahoma law, except perhaps to loosen the requirements of "writing" to a small degree.

Signing: Under the previous Oklahoma statute it was required that the writing be "subscribed by the party to be charged," and the Commercial Code requires "signed by the party against whom enforcement is sought." The word "subscribed" is often interpreted to mean "signature." The word "signed" is defined in 12A O.S. § 1 - 201(39) to include any symbol adopted by a party with present intention to authenticate a writing. Thus, the Commercial Code may relax the stricter previous Oklahoma requirement of "subscription." The difference, however, between the words "party to be charged," and "against whom enforcement is sought," does not appear to be material.

The previous Oklahoma statute permitted signing by an "agent," but the Commercial Code permits signing by an "agent or broker." In the proper situation the Commercial Code could have broader application because a "broker" may not, under the circumstances, be an "agent" sufficient to satisfy the requirements of the previous Oklahoma statute.

The last sentence of sub-section (1) has no previous counterpart in Oklahoma. Under the Commercial Code if the oral contract is for 1,000 units, but the writing stated only 500 units, the agreement is enforceable only for 500 units.

(2) There was no previous counterpart in Oklahoma. This, too, adds another exception to the statute of frauds not previously present in Oklahoma law.

(3) (a) The previous Oklahoma statute was silent on specially manufactured goods. By judicial decision it was held that such contracts were not for the sale of goods, but for labor and the furnishing of materials. Kansas Flour Mills Corp. v. Dreyfus Bros., 170 Okl. 325, 40 P.2d 20 (1935). The Commercial Code adds requirements not apparent in the previous Oklahoma decisions - that the goods must be "unsuitable" for sale to other before the verbal agreement is enforceable, and that the manufacturer must have made either a substantial beginning of their manufacture or a commitment for their procurement.

(b) Oklahoma has had no previous similar statute or decisions. This adds an innovation, the judicial admission, which has some support in the decisions of other states. This section will effectively deprive the defendant of the defense of statute of frauds in many cases.

(c) Partial performance and part payment: Under the previous Oklahoma statute, either part payment or performance by delivery and acceptance of a portion of the goods removes the entire agreement from the operation of the statute. Therefore, if there was an agreement to deliver 500 units for a consideration of $1,000, the delivery and acceptance of some of the units, although not all, or the payment of a part of the $1000 would render the entire contract enforceable. Under the Commercial Code the agreement is enforceable only as to the units delivered and accepted or paid for.