A contract for the sale of goods may be oral or written. In some cases, it must be evidenced by a writing or it cannot be enforced in court. Whenever the sales price of goods is $500 or more, the sales contract must be evidenced by a writing to be enforceable. The writing evidencing the sales contract may be either a complete written contract signed by both parties or (b) a memorandum signed by the defendant.

The writing must indicate that there has been a completed transaction as to certain goods. It needs to indicate that a sale has been made and the quantity of goods involved. Any other missing terms may be shown by parol evidence.

The writing must be signed by the person who is being sued or by the authorized agent of that person. The signature must be placed on the paper with the intention of authenticating the writing. The signature may consist of initials or may be printed, stamped, or typewritten, as long as it is made with the necessary intent.

When the transaction is between merchants, an exception is made to the requirement of signing. The failure of a merchant to repudiate a confirming letter sent by another merchant within ten days of receiving such a letter binds the merchant who did not sign just as he had signed the letter. This makes it necessary for a merchant seller to watch the mail and to act within ten days of receiving a mailed confirmation. For example, Adam and Sam both merchants, entered into an oral agreement for the sale of mattresses to Adam for $1,000. Adam immediately sent Sam a letter confirming the agreement. Sam did not make a written objection to the contents of Adam’s letter within ten days, but Sam refuses to deliver the mattresses. Sam is bound by the agreement.

A writing can satisfy a statute of frauds, even though it was not made for that purpose. When the buyer writes to the seller 30 days after delivery and merely criticizes the quality of the goods, the letter may satisfy the statute since it indicates that there was a sale of those goods. Formal contracts, bills of sale, and letters are common forms of writings that satisfy the requirement. Purchase orders, cash register receipts, sales tickets, invoices, and similar papers generally do not satisfy the requirement as to a signature, and sometimes they do not specify any quantity or commodity.

A sales agreement that does not satisfy the statute of frauds cannot be enforced. However, the oral contract itself is not unlawful and may be voluntarily performed by the parties.