Memo

This is to inform you that sales you make have to in writing. It is important that every contract that you make is in writing so that there is proof afterwards that an agreement has been made and on the terms. It may be necessary to present some writing after the contract has been made to remind the buyer of the terms he agreed upon.

The UCC 2-201 states that contracts have to be in writing if the good has a value of 500$ or more and it is between merchants. Both parties have to agree and the other party must have reasonable time to object the terms of the contract.

A sale between merchants has to be in writing according to the UCC 2-201. Merchants (UCC 2-104) are people who have superior knowledge about the good they sell and/or they deal with the goods on a regular basis. Therefore, everybody in the salesforce is a merchant. Since the buyer is a reseller, he too is a merchant. Therefore, the contract has to be in writing.

The UCC 2-201 states that a sale of a good for the price of 500$ or more is not enforceable unless it is in writing. Since we deal with goods that cost more than 500$ on a regular basis the contract has to be in writing.

The contract has also to be in writing so that the other party has reason to know the terms they have agreed upon. Although they know what they have agreed upon, they may not recognize the terms. The contract serves as evidence in such case. The other party has to sign the contract to show that they agree to the terms stated.

The buyer has to be allowed sufficient time to object the contract. The time starts to run the moment when both parties agree to the terms orally on the telephone. Therefore it is crucial that the contract is send out immediately. The fastest way will be through fax. The next day you will have to make a follow up telephone call to remind the buyer to sign the contract. The buyer has the chance to adjust the contract at that point. If the buyer wishes to make adjustments, write a new contract and send that new contract as soon as possible. Then follow the same procedure. Let the buyer know that we are not able to start production nor shipping until he has signed the contract.

If the buyer does not respond to any of the telephone calls nor to the fax, regard the contract as not existent. In this case, approach the buyer again and try to make a new sale. Do not threaten the buyer with any legal action because of the oral agreement made on the telephone.