CAS Bar CAS Bar Contracts and Commercial Law 4 — Questions and Answers
Question 1: Under the UCC, when a merchant seller fails to specify a delivery term, the default rule is that delivery occurs:
- At the buyer's place of business
- At the seller's place of business (Correct answer)
- At a mutually agreed-upon carrier
- At the midpoint between seller and buyer
Correct answer: At the seller's place of business
Under UCC § 2-308, absent a contrary agreement, the place for delivery is the seller's place of business or residence.
Question 2: A contract modification under common law requires:
- Writing if the original contract was written
- Consideration for the modification to be enforceable (Correct answer)
- Mutual assent but no additional consideration
- Approval by both parties' attorneys
Correct answer: Consideration for the modification to be enforceable
Under common law, a contract modification requires new consideration, unlike UCC contracts which only require good faith.
Question 3: Which doctrine allows a party to recover in quasi-contract when no valid contract exists but one party has been unjustly enriched?
- Promissory estoppel
- Quantum meruit (Correct answer)
- Accord and satisfaction
- Mutual rescission
Correct answer: Quantum meruit
Quantum meruit is the quasi-contractual remedy allowing recovery for the reasonable value of services rendered when no enforceable contract exists but one party would be unjustly enriched.
Question 4: Under UCC Article 2, a 'firm offer' made by a merchant is irrevocable for up to:
- 30 days
- 60 days
- 90 days (Correct answer)
- 6 months
Correct answer: 90 days
Under UCC § 2-205, a merchant's firm offer is irrevocable for the stated time, or if no time is stated, for a reasonable time not exceeding three months (90 days).
Question 5: When a buyer rightfully rejects non-conforming goods, which remedy is NOT available to the buyer?
- Cover by purchasing substitute goods
- Recover the purchase price already paid
- Obtain specific performance (Correct answer)
- Cancel the contract
Correct answer: Obtain specific performance
Specific performance is an equitable remedy generally available only when goods are unique or circumstances make other remedies inadequate; rightful rejection does not automatically entitle a buyer to specific performance.
Question 6: The parol evidence rule bars extrinsic evidence to vary a written contract but does NOT bar evidence introduced to show:
- Prior negotiations that contradict the written terms
- A course of dealing that supplements the agreement (Correct answer)
- A prior oral agreement that directly conflicts with the writing
- An earlier written agreement on the same subject matter
Correct answer: A course of dealing that supplements the agreement
Course of dealing, course of performance, and trade usage may be used to explain or supplement a written contract, even a fully integrated one, as long as they do not contradict express terms.
Question 7: Under the perfect tender rule applicable to UCC contracts, a seller's right to cure a defective shipment exists when:
- The buyer notifies the seller of the defect within 48 hours
- The time for performance has not yet expired or the seller had reasonable grounds to believe the tender was acceptable (Correct answer)
- The contract is for goods worth over $500
- The buyer has not yet paid for the goods
Correct answer: The time for performance has not yet expired or the seller had reasonable grounds to believe the tender was acceptable
UCC § 2-508 allows a seller to cure a defective tender if the time for performance has not expired, or if the seller had reasonable grounds to believe the nonconforming tender was acceptable.
CAS Bar CAS Bar Contracts and Commercial Law 4
Under the UCC, when a merchant seller fails to specify a delivery term, the default rule is that delivery occurs: