I always advise clients to "get it in writing." This is good advice generally when you are buying anything important, but is especially important when buying sportscards or other collectibles, for reasons we will see throughout this and subsequent columns.
The most important reason for a written contract is a practical one. If there is an agreement, the parties should have something besides their own memories to back it up. Even close friends know that agreements are stronger and more closely followed if they are in writing and unambiguous. But there is also a good legal reason to have a written agreement. Oral agreements to sell collectibles may not be enforceable against the dealer, based on a very old principle of law called the Statute of Frauds.
The Statute of Frauds, which is incorporated in most states' laws through the Uniform Commercial Code ("UCC"), declares that contracts for the sale of goods over $500 are not enforceable unless they are in writing and signed by the party to be charged with the obligation. The purpose of this rule is to avoid "your word against mine" litigation over exactly what oral agreements might have been made between buyers and sellers.
Satisfying the Statute of Frauds doesn't require a formal, legalistic document. The official comment to the relevant UCC section states that "It may be written in lead pencil on a scratch pad." However, the writing must contain three elements.
First, it must "evidence a contract for the sale of goods," as opposed to an offer to negotiate a sale, or an offer to do something else. For example, consider a letter signed by John Smith stating "I'd like to buy your 1952 Topps Mantle rookie card for $5,000. Call me by Friday the 11th if you are interested." This is not a contract, but merely an offer to purchase the card. The recipient must accept the offer during the allotted time.
Second, the UCC requires that the writing be "signed", though an actual signature is not required, only an "authentication which identifies the party to be charged." Many collectibles dealers do not sign their invoices, but use letterhead that clearly identifies them as the seller, and contains the buyer's name as well. Also, in e-mail exchanges often a party is identified by his or her e-mail address or "handle," which should satisfy the Statute of Frauds in lieu of an actual signature.
Third, the writing must specify a quantity of goods being purchased, a requirement that has little application to most collectibles transactions.
Note that the UCC does not require that the written documents contain the contract price. This seems odd, given the vital importance of price to any purchase or sale agreement. The UCC's attitude, however, is that the court can always use market information to insert a reasonable price into a contract if the parties don't remember it the same way, but the court cannot tell the parties what (or how many) items were purchased and sold.
The Statute of Frauds has certain common "exceptions," i.e., situations where the existence of the contract can be proven without anything in writing. An example is where the contract has been acknowledged by the parties' performance, such as where the buyer has accepted delivery of the card and the dealer has deposited the buyer's check. The parties will most likely be bound to a contract for sale of the card at that price, even if no invoice or other document was ever generated. However, keep in mind that without a written agreement, anything else that may have been agreed orally by the dealer -- such as a return privilege or warranties regarding grade, provenance and attribution -- would not be enforceable against the dealer because of the Statute of Frauds.
So get it in writing!
Armen R. Vartian is a Manhattan Beach, California attorney specialized in matters relating to collectibles. He is the author of the book Legal guide to Buying and Selling Art and Collectibles.