Contracts and Sales Multistate Bar Practice Exam

Which of the following describes an exception to the Statute of Frauds for specially manufactured goods?

1. All goods must be standardized

2. The items cannot be delivered to the buyer's location

3. Goods made for a specific buyer cannot be canceled

4. Goods must be produced for sale to the general public

The correct answer is: Goods made for a specific buyer cannot be canceled

The correct answer highlights the unique nature of specially manufactured goods in the context of the Statute of Frauds. The Statute of Frauds requires certain types of contracts to be in writing to be enforceable, and one of the exceptions pertains to contracts involving specially manufactured goods. When goods are made specifically for a particular buyer and are not suitable for sale to others in the ordinary course of business, the seller cannot easily cancel the order without financial detriment to the buyer. This means that once production of such goods begins, the seller is committed, and the buyer has a right to enforce the contract despite the general requirement for written contracts under the Statute of Frauds. This protects buyers who order unique items tailored to their specifications, ensuring that they have recourse if the seller attempts to back out. This understanding underscores the importance of distinguishing specially manufactured goods from standard items meant for broader sale. It reinforces the protection offered to buyers in specialized transactions where the goods in question are uniquely tailored and cannot be easily diverted for alternate sales. The other options do not accurately reflect the conditions under which the Statute of Frauds can be set aside for specially manufactured goods. Standardization, delivery requirements, and the potential for resale in the general market do not apply