This contract is about buying or selling goods without a contract.
Let's be real. It happens.
- Your supply chain buyer sends a purchase order without any terms attached.
- Your Operations VP calls a supplier and submits an order by phone.
Yes, we lawyers prefer to have something in writing. And the Statute of Frauds requires it for goods valued at over $500. But, as Mick Jagger reminded us, you can't always get what you want.
It is not the end of the world.
Because in most cases, these deals are smaller one-off purchases or sales. There is still a risk, but a very different risk than buying millions of dollars of goods on an ongoing basis.
And while you don't have a contract, you are not entirely exposed. You still have insurance as a back-stop. There also are product liability laws that protect you.
There are statutory terms that may provide default terms and conditions for you. The Uniform Commercial Code (UCC) would cover deals between U.S. parties. The international equivalent is the U.N. Convention on the International Sale of Goods (CISG).
The UCC and CISG have gap-filling terms that provide default terms when the parties have not agreed.
All that said, I do worry A LOT when we need other protections not provided by insurance, product liability laws, and gap-filling under the UCC and CISG. These worries are usually when we incorporate the purchased good into ours, when it is an inherently dangerous product, or when there is intellectual property involved.
Have you ever deal with problems after someone bought goods without a contract? How did it work out?
