Updated: Sep 11
What a Vancouver, WA business needs to know about the more lenient rules for forming a goods contract.
Different Rules for Goods Contracts
Contracts for the sale of goods in Vancouver, Washington are governed by the Washington Uniform Commercial Code (WUCC). The WUCC is based on the Uniform Commercial Code, which is a proposed state law drafted and approved by the Uniform Law Commission, and adopted at least in part in every U.S. state. Part of the WUCC deals specifically with contracts for the sale of goods. And the rules for goods contracts, though similar, are different than the rules for contracts in general. One important difference involves the process of forming an enforceable contract.
The Basics of Contract Formation
An enforceable contract in WA is comprised of three primary elements: the offer; the acceptance; and consideration. The rules for the offer and acceptance are more exacting with contracts in general, than they are with goods contracts. Take a look at how the two processes compare.
With contracts in general, the terms and conditions of an offer must be reasonably detailed. An offer with unclear or missing terms and conditions cannot form the basis of a contract.
However, with goods contracts, the rule is less exacting. If two parties intend to enter into a binding agreement, a contract exists, even if some of the offer's terms are omitted or left open. Where there are omitted or unclear terms, the WA Commercial Code provides rules for deciding how to fill the gaps. This often requires the use of parol evidence, which is discussed in this article.
"...a contract exists, even if some of the offer's terms are omitted or left open."
With contracts in general, the acceptance must be unconditional, definite, and legally communicated. If one of these requirements is missing or altered, there is no binding contract.
With contracts for the sale of goods, the WUCC allows the offeree to add to or change terms, and acceptance may be communicated in any reasonable way. The acceptance can add a condition to the original offer. A contract is formed, and then we look to the "material alteration" rule to see if the new condition becomes part of the final contract. If the offeror does not reject the new condition, it becomes a part of the final contract, if it is not a material alteration. A material alteration is one which would cause undue hardship or surprise to the offeror.
Merchants usually need to replace their inventory quickly. Unlike a contract for a service like constructing a building, there's often less time to negotiate when forming a goods contract. Therefore, in practice what happens is that the buyer and seller each have their own form of a contract that they use when doing business. These forms could be called anything.
For instance, suppose the buyer uses a form called an "acquisition agreement," and the seller uses a form they call a "purchase order agreement." Each is a contract template that was drafted with their respective best interests in mind. Both are exchanged and signed by each party. We now have essentially two different contracts, which may have missing or additional terms.
Suppose the goods are sold at what is describe as "market price." We still have a contract, even though the specific price is unclear at this point. Additionally, the form sent from the party making an acceptance may have a new condition that wasn't contained in the offer form. There is still a contract even with the new condition.
"We still have a contract, even though the specific price is unclear at this point."
The final contract includes the terms from both forms, taken together as whole. Even the new condition forms part of the final contract, assuming it was not rejected by the offeror and is not a material alteration.
One last note:
The statute of frauds requires that contracts for the sale of goods, worth $500 or more, must be in writing to be enforceable.
If you have more questions about contracts for the sale of goods in Vancouver, WA, or about the Washington Uniform Commercial Code in general, please contact In-house | On-site to speak with a Vancouver, WA lawyer.