Code of Virginia

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Code of Virginia
Title 8.2. Commercial Code - Sales
Part 2. Form, Formation and Readjustment of Contract.
Part .
8/8/2022

Part 2. Form, Formation and Readjustment of Contract..

§ 8.2-201. Formal requirements; statute of frauds.

(1) Except as otherwise provided in this section a contract for the sale of goods for the price of $500 or more is not enforceable by way of action or defense unless there is some writing sufficient to indicate that a contract for sale has been made between the parties and signed by the party against whom enforcement is sought or by his authorized agent or broker. A writing is not insufficient because it omits or incorrectly states a term agreed upon but the contract is not enforceable under this paragraph beyond the quantity of goods shown in such writing.

(2) Between merchants if within a reasonable time a writing in confirmation of the contract and sufficient against the sender is received and the party receiving it has reason to know its contents, it satisfies the requirements of subsection (1) against such party unless written notice of objection to its contents is given within ten days after it is received.

(3) A contract which does not satisfy the requirements of subsection (1) but which is valid in other respects is enforceable

(a) if the goods are to be specially manufactured for the buyer and are not suitable for sale to others in the ordinary course of the seller's business and the seller, before notice of repudiation is received and under circumstances which reasonably indicate that the goods are for the buyer, has made either a substantial beginning of their manufacture or commitments for their procurement; or

(b) if the party against whom enforcement is sought admits in his pleading, testimony or otherwise in court that a contract for sale was made, but the contract is not enforceable under this provision beyond the quantity of goods admitted; or

(c) with respect to goods for which payment has been made and accepted or which have been received and accepted (§ 8.2-606).

1964, c. 219.

§ 8.2-202. Final written expression; parol or extrinsic evidence.

Terms with respect to which the confirmatory memoranda of the parties agree or which are otherwise set forth in a writing intended by the parties as a final expression of their agreement with respect to such terms as are included therein may not be contradicted by evidence of any prior agreement or of a contemporaneous oral agreement but may be explained or supplemented

(a) by course of performance, course of dealing or usage of trade (§ 8.1A-303); and

(b) by evidence of consistent additional terms unless the court finds the writing to have been intended also as a complete and exclusive statement of the terms of the agreement.

1964, c. 219; 2003, c. 353.

§ 8.2-203. Seals inoperative.

The affixing of a seal to a writing evidencing a contract for sale or an offer to buy or sell goods does not constitute the writing a sealed instrument and the law with respect to sealed instruments does not apply to such a contract or offer.

1964, c. 219.

§ 8.2-204. Formation in general.

(1) A contract for sale of goods may be made in any manner sufficient to show agreement, including conduct by both parties which recognizes the existence of such a contract.

(2) An agreement sufficient to constitute a contract for sale may be found even though the moment of its making is undetermined.

(3) Even though one or more terms are left open a contract for sale does not fail for indefiniteness if the parties have intended to make a contract and there is a reasonably certain basis for giving an appropriate remedy.

1964, c. 219.

§ 8.2-205. Firm offers.

An offer by a merchant to buy or sell goods in a signed writing which by its terms gives assurance that it will be held open is not revocable, for lack of consideration, during the time stated or if no time is stated for a reasonable time, but in no event may such period of irrevocability exceed three months; but any such term of assurance on a form supplied by the offeree must be separately signed by the offeror.

1964, c. 219.

§ 8.2-206. Offer and acceptance in formation of contract.

(1) Unless otherwise unambiguously indicated by the language or circumstances

(a) an offer to make a contract shall be construed as inviting acceptance in any manner and by any medium reasonable in the circumstances;

(b) an order or other offer to buy goods for prompt or current shipment shall be construed as inviting acceptance either by a prompt promise to ship or by the prompt or current shipment of conforming or nonconforming goods, but such a shipment of nonconforming goods does not constitute an acceptance if the seller seasonably notifies the buyer that the shipment is offered only as an accommodation to the buyer.

(2) Where the beginning of a requested performance is a reasonable mode of acceptance an offeror who is not notified of acceptance within a reasonable time may treat the offer as having lapsed before acceptance.

1964, c. 219.

§ 8.2-207. Additional terms in acceptance or confirmation.

(1) A definite and seasonable expression of acceptance or a written confirmation which is sent within a reasonable time operates as an acceptance even though it states terms additional to or different from those offered or agreed upon, unless acceptance is expressly made conditional on assent to the additional or different terms.

(2) The additional terms are to be construed as proposals for addition to the contract. Between merchants such terms become part of the contract unless:

(a) the offer expressly limits acceptance to the terms of the offer;

(b) they materially alter it; or

(c) notification of objection to them has already been given or is given within a reasonable time after notice of them is received.

(3) Conduct by both parties which recognizes the existence of a contract is sufficient to establish a contract for sale although the writings of the parties do not otherwise establish a contract. In such case the terms of the particular contract consist of those terms on which the writings of the parties agree, together with any supplementary terms incorporated under any other provisions of this act.

1964, c. 219.

§ 8.2-208. Repealed.

A. As used in this section:

"Biogas" has the same meaning as set forth in § 56-248.1.

"Biogas facilities" means biogas reserves; production facilities, including equipment required to prepare the biogas for use; gathering of, transmission of, and, within the natural gas utility's certificated service territory, any distribution pipelines necessary to deliver the reserves; and aboveground and underground storage used in the delivery of gas to existing natural gas transmission pipelines or distribution systems.

"Biogas supply investment plan" or "plan" means a plan filed by a natural gas utility that identifies proposed eligible biogas supply infrastructure projects and its development of those projects with or without a third party.

"Eligible biogas supply infrastructure costs" includes the investment in eligible biogas supply infrastructure projects and the following:

1. Return on the investment. In calculating the return on the investment, the Commission shall use the natural gas utility's regulatory capital structure in effect during the construction period of the eligible biogas supply infrastructure project. The regulatory capital structure shall be calculated utilizing the weighted average cost of capital, including the cost of debt and the cost of equity, plus an additional 100 basis points added to the cost of equity. If the natural gas utility's cost of capital underlying the base rates in effect at the time its proposed eligible biogas supply infrastructure project is filed has not been changed by order of the Commission within the preceding five years, the Commission may require the natural gas utility to file an updated weighted average cost of capital, and the natural gas utility may propose an updated weighted average cost of capital. The natural gas utility may recover the external costs associated with establishing its updated weighted average cost of capital through a biogas supply rider. Such external costs shall include legal costs and consultant costs;

2. A revenue conversion factor. Such factor, including income taxes, shall be applied to the required operating income resulting from the eligible biogas supply infrastructure costs;

3. Operating and maintenance expenses. These expenses include the amount of operating and maintenance expenses utilized in biogas collection; processing the gas produced; and gathering, transmission, and distribution lines delivering the gas to a pipeline or distribution system;

4. Depreciation. In calculating depreciation, the Commission shall use the natural gas utility's current depreciation rates for investments in distribution infrastructure, as set out by the appropriate asset class. The natural gas utility shall propose a basis for recovering for the depreciation or depletion of investments in other asset classes in the biogas supply investment plan, including investments in biogas reserves that will deplete based on their useful life or of associated facilities that may be retired upon depletion of biogas reserves;

5. Property tax and any other taxes or government fees associated with production and transmission of biogas; and

6. Carrying costs on the over-recovery or under-recovery of the eligible biogas supply infrastructure costs. In calculating the carrying costs, the Commission shall use the natural gas utility's regulatory capital structure as determined in subdivision 1.

"Eligible biogas supply infrastructure projects" or "projects" means capital investments in biogas facilities that, alone or in combination with other projects or strategies, offer reasonably anticipated benefits to customers and markets, which benefits mean (i) a reduction in methane or carbon dioxide equivalent emissions from the biogas facility, (ii) an additional source of supply for the natural gas utility, and (iii) a beneficial use for the biogas, and which benefits do not result in the gas delivered to customers failing to meet the natural gas utility's pipeline quality standards.

"Investment" means actual costs incurred on eligible biogas supply infrastructure projects, including planning, development, and construction costs; actual costs of infrastructure associated therewith; and an allowance for funds used during construction. In calculating the allowance for funds used during construction, the Commission shall use the natural gas utility's actual regulatory capital structure as determined in subdivision 1 of the definition of "eligible biogas supply infrastructure costs."

"Natural gas utility" means an investor-owned public service company engaged in the business of furnishing natural gas service to the public.

B. A natural gas utility shall have the right to recover eligible biogas supply infrastructure costs on an ongoing basis through the gas cost component of the natural gas utility's rate structure or other recovery mechanism approved by the Commission, provided that any such mechanism shall properly allocate costs. Natural gas utilities using the cost of service methodology set forth in § 56-235.2 or a performance-based regulation plan authorized by § 56-235.6 shall be eligible to file a plan. The plan shall include a timeline for the investment and completion of the proposed eligible biogas supply infrastructure projects; provide for an estimated schedule for recovery of the related eligible biogas supply infrastructure costs through the gas cost component of the natural gas utility's rate structure or other mechanism, including proposed depreciation rates for investments in non-distribution asset classes and how any revenue gains from the use of the pipelines by third parties will be used to offset eligible biogas supply infrastructure costs; and demonstrate that the plan is in the public interest with due consideration to the reduction in methane or carbon dioxide equivalent emissions and the addition of a supply source for the natural gas utility or a combination thereof. No project shall provide an annual volume of biogas that exceeds three percent of the natural gas utility's annual firm sales demand, and no combination of projects shall provide an annual volume of biogas that exceeds 15 percent of the natural gas utility's annual firm sales demand. The natural gas utility's weather-normalized firm sales demand for the calendar year preceding the application shall be deemed to establish the annual firm sales demand for the purposes of calculating the volume and volumetric limits of projects. The Commission shall approve such a plan upon a finding that it (i) is in the public interest, (ii) will result in a decrease of methane or carbon dioxide equivalent emissions, and (iii) will result in rates that are just and reasonable, after notice and an opportunity for a hearing in accordance with the provisions of this chapter.

C. In addition to the items included in the plan as specified in subsection B, the plan may provide the natural gas utility with an option to receive the biogas or sell the biogas at market prices. A natural gas utility proposing this option as part of its plan shall propose how any revenue gains from the sale of the biogas will be used to reduce the cost of gas to its customers. The Commission shall approve or deny, within 180 days, a natural gas utility's initial application for a biogas supply investment plan. A plan filed pursuant to this section shall not require the filing of rate case schedules. The Commission shall approve or deny, within 120 days, a natural gas utility's application to amend a previously approved plan. If the Commission denies such a plan or amendment, it shall set forth with specificity the reasons for such denial, and the natural gas utility shall have the right to refile, without prejudice, an amended plan or amendment within 60 days, and the Commission shall thereafter have 60 days to approve or deny the amended plan or amendment. If the plan is filed as part of a general rate case using the cost of service methodology set forth in § 56-235.2 or a performance-based regulation plan authorized by § 56-235.6, then the Commission shall approve or deny the plan concurrent with or as part of the general rate case decision.

D. No other revenue requirement or ratemaking issues shall be examined in consideration of a plan filed pursuant to the provisions of this section.

E. A natural gas utility with an approved biogas supply investment plan shall annually file a report of the eligible biogas supply infrastructure investment made, the eligible biogas supply infrastructure costs incurred and the amount of such costs recovered, the volume of biogas delivered to customers or sold to third parties during the 12-month reporting period, and an analysis of the price of biogas delivered to the natural gas utility customers and the market cost of gas during the 12-month period. However, such analysis shall not affect a natural gas utility's right to recover all eligible biogas supply infrastructure costs as set forth in subsection B. The report shall also identify the balance of over-recovery or under-recovery of the eligible biogas supply infrastructure costs at the end of the reporting period and the projected investment to be made, the projected infrastructure costs to be incurred, and the projected costs to be recovered during the next 12-month reporting period.

F. Costs recovered pursuant to this section shall be in addition to all other costs that the natural gas utility is permitted to recover and shall not be considered an offset to other Commission-approved costs of service or revenue requirements.

2022, cc. 728, 759.

§ 8.2-209. Modification, rescission and waiver.

(1) An agreement modifying a contract within this title needs no consideration to be binding.

(2) A signed agreement which excludes modification or rescission except by a signed writing cannot be otherwise modified or rescinded, but except as between merchants such a requirement on a form supplied by the merchant must be separately signed by the other party.

(3) The requirements of the statute of frauds section of this title (§ 8.2-201) must be satisfied if the contract as modified is within its provisions.

(4) Although an attempt at modification or rescission does not satisfy the requirements of subsection (2) or (3) it can operate as a waiver.

(5) A party who has made a waiver affecting an executory portion of the contract may retract the waiver by reasonable notification received by the other party that strict performance will be required of any term waived, unless the retraction would be unjust in view of a material change of position in reliance on the waiver.

1964, c. 219.

§ 8.2-210. Delegation of performance; assignment of rights.

(1) A party may perform his duty through a delegate unless otherwise agreed or unless the other party has a substantial interest in having his original promisor perform or control the acts required by the contract. No delegation of performance relieves the party delegating of any duty to perform or any liability for breach.

(2) Except as otherwise provided in § 8.9A-406, unless otherwise agreed all rights of either seller or buyer can be assigned except where the assignment would materially change the duty of the other party, or increase materially the burden or risk imposed on him by his contract, or impair materially his chance of obtaining return performance. A right to damages for breach of the whole contract or a right arising out of the assignor's due performance of his entire obligation can be assigned despite agreement otherwise.

(3) The creation, attachment, perfection, or enforcement of a security interest in the seller's interest under a contract is not a transfer that materially changes the duty of or increases materially the burden or risk imposed on the buyer or impairs materially the buyer's chance of obtaining return performance within the purview of subsection (2) unless, and then only to the extent that, enforcement actually results in a delegation of material performance of the seller. Even in that event, the creation, attachment, perfection, and enforcement of the security interest remain effective, but (i) the seller is liable to the buyer for damages caused by the delegation to the extent that the damages could not reasonably be prevented by the buyer and (ii) a court having jurisdiction may grant other appropriate relief, including cancellation of the contract for sale or an injunction against enforcement of the security interest or consummation of the enforcement.

(4) Unless the circumstances indicate the contrary a prohibition of assignment of "the contract" is to be construed as barring only the delegation to the assignee of the assignor's performance.

(5) An assignment of "the contract" or of "all my rights under the contract" or an assignment in similar general terms is an assignment of rights and unless the language or the circumstances (as in an assignment for security) indicate the contrary, it is a delegation of performance of the duties of the assignor and its acceptance by the assignee constitutes a promise by him to perform those duties. This promise is enforceable by either the assignor or the other party to the original contract.

(6) The other party may treat any assignment which delegates performance as creating reasonable grounds for insecurity and may without prejudice to his rights against the assignor demand assurances from the assignee (§ 8.2-609).

1964, c. 219; 2000, c. 1007.