If review of a contract indicates an undesirable allocation of
tariff costs, consider whether there is even an obligation to
purchase or supply under the agreement.
UCC § 2-201(1): Threshold for Enforceability
Section 2-201(1) of the Uniform Commercial Code (the
“UCC”), which has been adopted in all 50 states except
Louisiana, provides that a contract for the sale of goods for the
price of $500 is only enforceable up to the quantity specified.
Formulation of Quantity Clauses
Common approaches that companies use to specify binding
quantities in their contracts pursuant to the UCC include the
following:
- Minimum Volume Commitment – The
parties agree that the buyer will buy and the supplier will sell at
least a certain volume of product.
