For each contract, it is a good advice to transfer all the details of the agreement to a letter signed by all parties. It is always best to consult your lawyer to ensure that the contract is not only written, but in accordance with the many and diverse statutes written in the books in Pennsylvania. Other laws have extended the fraud law to contracts that do not concern real estate. The Pennsylvania Uniform Trade Code (UCC) at 13 S.S. 2201 (a) provides that a contract for the sale of goods at $500.00 or more is not legally binding, without a written indication sufficient to indicate that a contract has been signed by the party against whom performance is requested. While the general rule is that both parties must sign a sales contract for $500.00 or more, the UCC also makes some concessions to the realities of our rapidly changing business world. Art. 2201 (b) states that “if, within a reasonable period of time, a contract is confirmed in writing and sufficiently addressed to the sender and the receiving party has reason to know its contents, it meets the requirements of sub-party (a) of that party, unless an objection to its content is made in writing within ten days of receipt.” If both parties are merchants, unlike consumers, then even if the parties do not sign a contract to recall their contract for the sale of goods, if a party subsequently sends a confirmation of an order sufficient to link the sender to the deal, the recipient of the order will also be bound, unless the recipient objects in due course to the terms of the order confirmation. Thus, the UCC considers knowledge of tolerance to be the equivalent of the signed agreement.
The Fraud Act has its roots in the Law on the Prevention of Fraud and Perjury, passed by the English Parliament in 1677. The legislation, which provided for a written contract for transactions involving large amounts of money, was intended to avoid certain misunderstandings and fraudulent activities that may occur when they are based on oral contracts.