What is the monetary limit for an oral contract under the UCC?

Under the Uniform Commercial Code (UCC), an oral contract for the sale of goods is enforceable up to a certain monetary limit, which is set at $500. This rule applies specifically to contracts involving the sale of goods, emphasizing the importance of written documentation for transactions that exceed this value.

The rationale behind this limitation is to protect parties from the uncertainties associated with oral agreements, particularly in commercial transactions where larger sums of money are involved. By establishing a threshold, the UCC ensures that contracts of significant value are properly documented, thus reducing the risk of disputes regarding the terms and provisions of the agreement.

Higher financial thresholds, as suggested in other options, do not align with the UCC's established guidelines. As a result, the accurate understanding of this limit reinforces the importance of validating agreements and encourages written contracts in business dealings involving substantial amounts.