Purchasing goods is a routine necessity for most people. No matter what we are purchasing, we want to make sure that we are getting what we have promised to pay for, or we are receiving the money promised for the goods we are selling. This is increasingly important in situations where there is a large amount of money at stake. In Part 4 of our series on the Ohio statute of frauds we discussed why a transfer of an interest in land must be in writing. Like land, purchases of goods, whether for business or personal use, can involve a lot of money and demand reassurance from both buyer and seller. For this reason, it is important to make sure your contracts for the sale of goods comply with the Ohio statute of frauds.
Ohio Revised Code § 1302.04(A), in line with Uniform Commercial Code § 2-201, states that, “Except as otherwise provided in this section 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 authorized agent or broker.”
This means that when an agreement is made for the purchase of goods, and the price of the goods at the time of purchase exceeds $500, the agreement needs to be made in writing to be enforceable.
A Summit County case involving heavy construction equipment illustrates the amount of money that can be at stake and the necessity of written contracts for the purchase of goods exceeding $500.
An oral contract was made between Summit Tree & Landscaping and Stow Contracting, in which payments were to be made by Stow towards the purchase of a bulldozer and skid steer “Bobcat” for a sales total of $110,000. Stow began making payments towards the equipment over the course of several months before a dispute arose between the parties about the remaining balance. At this point Summit Tree repossessed the bulldozer. As a result, Stow had to pay for a bulldozer rental before purchasing a bulldozer for over $101,000. Given the fact that the original contract between Stow and Summit Tree was made for the sales of goods well over $500, the court held that a written contract needed to be in place to comply with the Ohio statute of frauds. Without a written contract, Summit Tree was free to take back the bulldozer.
This case demonstrates the importance of adhering to the statute of frauds requirement. To be enforceable, a contract for the sale of goods that exceeds $500 must be written and it must be signed. Some exceptions and defenses do exist to this statute of frauds requirement, and due to one such exception, the oral contract between Summit Tree & Landscaping and Stow Contracting was later enforced. The particulars of these exceptions can be complicated, however, and are best discussed with a qualified attorney.
Crumpton Law LLC and its attorneys practice small business law in Columbus, Ohio, and throughout the surrounding counties and cities of Franklin County, Delaware County, Union County, Madison County, Pickaway County, Fairfield County, Licking County, Dublin, Powell, Lewis Center, Worthington, Westerville, New Albany, Gahanna, Bexley, Reynoldsburg, Canal Winchester, Grove City, Hilliard and Upper Arlington.
