What are the consequences of breaking a verbal agreement between a company and a private seller?

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What are the consequences of breaking a verbal agreement between a company and a private seller?

In this case, the private seller verbally agreed to sell goods to a company at a fixed price, and later sells all their goods to another company at a higher price. This in effect made the original company buy different goods from a different source (much more expensive), which soon after had sales decrease tremendously. Can there be a lawsuit over this? And if so, for what type of damages? What is the most likely outcome for something like this?

Asked on December 6, 2010 under Business Law, California

Answers:

MD, Member, California Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

When there is a verbal agreement, the sale of goods must be in writing under the statute of frauds if the sale involved more than $500.00.  The reason this type of agreement must be in writing is so that everyone involved has a meeting of the minds and understand exactly what each other's consideration (what they give up) is in order to enter into this agreement.  You still may be able to prove a writing through things like emails but understand that if it were in writing, you may be able to get the price you had to pay over what you had originally agreed upon with the initial seller.  That would be considered your true damages.

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

You need to seek help from an attorney in your area.  Although verbal contracts can indeed be upheld in some instance, contracts for the sale of goods comes under the Uniform Commercial Code (UCC) and is subject to a statute known as the Statute of Frauds, which says that contracts for the sale of certain things  - like goods and real estate - have to be in writing or they are not valid.  You may be out of luck here as to the sale.  Plus, you seem to want to sue for a lost profit somehow, is that correct?  Then I really do suggest that you seek help from an attorney in your area.  Good luck.


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