Enforceability of Sale Agreement between Lucas and Natural Beverages

Explanation of Enforceability of Sale Agreement

Lucas orally agrees to sell his Mountain Spring Water Company to Natural Beverages, Inc. Lucas notes the terms on a sheet of Mountain Spring stationery and signs it. This agreement is most likely enforceable against Lucas.

Both the UCC (Uniform Commercial Code) and the statute of frauds require that this sale agreement must be written. The UCC states that contracts over $500 must be in writing, and since the company is likely worth more than $500, this requirement applies. The statute of frauds stipulates that contracts involving real property must be in writing, and as Mountain Springs likely owns at least one real property, this regulation also applies. Both regulations establish that a signature must be present for the contract to be binding.

Since Lucas signed the agreement, it is enforceable against him. However, it is not enforceable against Natural Beverages since they did not sign it. Therefore, the sale agreement is most likely enforceable against Lucas only in this scenario.