The Good News provides a monthly column with important content having to do with topics from the legal community. We hope our readers enjoy the perspective offered. This month’s legal opinion is provided by Chuck Tatelbaum, a director with Tripp Scott.
ASK BILL: I have heard that if someone is buying or selling goods in Florida, there must be a written contract if the price is more than $500. Is that true?
Tatelbaum: Yes, it is. Under the Florida version of the Uniform Commercial Code, which is a law that is virtually identical throughout the US, in order for a contract for the sale of goods for the prices of $500 or more to be enforceable, it must be in writing.
ASK BILL: What do you mean by the term “goods”?
Tatelbaum: Virtually anything that is tangible other than real estate.
ASK BILL: Why is this important to me in my business or personal life?
Tatelbaum: As a seller or buyer of goods, you need to make sure that in the event of a breach of contract or a default, you have rights and remedies available to you to recompense you for any losses. If an agreement for more than $500 is not in writing and unenforceable, you will have a difficult time if you need to proceed with litigation or other remedies.
ASK BILL: If I am selling goods, what are the important points from me to know?
Tatelbaum: Putting payment terms such as net 30 days on an invoice has no legal enforceability in Florida unless the written contract references payment terms either in the contract or on invoices. Thus, without a written contract with the correct language, it can be argued that the payment due date is uncertain.
ASK BILL: As a seller of goods, is there anything else that is important for me to be aware of?
Tatelbaum: There are several things that are very significant. Absent language in a written sales agreement, with respect to the goods being sold, in order to clarify, delineate or limit warranty exposure, the written contract must deal with this. Also, many sales of goods are in response to purchase orders. Unless the written contract for the sale of goods contains appropriate disclaiming language, the terms and conditions in the purchase order can be binding on the seller, even if those terms and conditions are contrary to the seller’s normal terms and conditions of sale. Lastly, the rights and remedies of a seller in the event of a default by the buyer can be limited unless the written contract provides for appropriate remedial relief in the event of a breach or default.
ASK BILL: Let us assume I am the buyer of goods, either on a commercial or consumer basis, why is it important to me to have a written contract?
Tatelbaum: Buyers of goods are entitled by law to certain implied warranties concerning the goods being purchased. The written contract needs to spell out whether or not these implied warranties are in force and whether there are any express warranties being given to the buyer. Also, if the goods are delivered late, they are defective, they are not consistent with the purchase order or there is some other breach or default, the buyer’s rights and remedies need to be set out in a written contract in order to be enforceable.
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William “Bill” C. Davell, Esq. is a director with Tripp Scott, PA.