CO Bar Contracts and Sales 2 — Questions and Answers
Question 1: A merchant emails another merchant: 'I offer to sell you 500 widgets at $10 each. This offer will remain open for 10 days.' Three days later, before any acceptance, the offeror emails a revocation. Under UCC Article 2, is the revocation effective?
- No, because a signed merchant's firm offer is irrevocable for the stated period up to three months (Correct answer)
- Yes, because no consideration was paid to keep the offer open
- Yes, because firm offers only apply to goods over $500
- No, because all merchant offers are irrevocable for 90 days regardless of terms
Correct answer: No, because a signed merchant's firm offer is irrevocable for the stated period up to three months
Under UCC 2-205, a signed writing by a merchant giving assurance an offer will be held open is irrevocable without consideration for the stated time, up to three months.
Question 2: A homeowner promises to pay a painter $5,000 for painting her house. After the painter finishes, the homeowner says, 'You did such great work, I'll pay you an extra $500 next week.' She never pays the extra $500. Is the promise to pay the extra $500 enforceable?
- No, because it is not supported by consideration since the painting was already completed (Correct answer)
- Yes, because it was made in writing
- Yes, because moral obligation always supports a promise
- No, because the original contract had a merger clause
Correct answer: No, because it is not supported by consideration since the painting was already completed
Past consideration is not valid consideration, so a promise made for work already performed is generally unenforceable.
Question 3: A buyer and seller sign a fully integrated written contract for the sale of land. The buyer later claims the seller orally promised, before signing, to also include a tractor at no extra cost. May the buyer introduce evidence of the oral promise?
- No, because the parol evidence rule bars prior oral terms that contradict or supplement a fully integrated writing (Correct answer)
- Yes, because oral promises always survive integration
- Yes, because the parol evidence rule applies only to sales of goods
- No, because land contracts can never include personal property
Correct answer: No, because the parol evidence rule bars prior oral terms that contradict or supplement a fully integrated writing
The parol evidence rule excludes evidence of prior or contemporaneous agreements offered to supplement or contradict a complete integration.
Question 4: A contractor agrees to build a deck for $8,000. Midway through, the contractor demands $2,000 more due to rising lumber costs, and the homeowner agrees. Under common law, is the modification enforceable?
- No, unless supported by new consideration or unanticipated circumstances, due to the preexisting duty rule (Correct answer)
- Yes, because modifications never require consideration
- Yes, because the homeowner voluntarily agreed
- No, because all modifications must be in writing
Correct answer: No, unless supported by new consideration or unanticipated circumstances, due to the preexisting duty rule
Under the common law preexisting duty rule, a promise to pay more for a duty already owed is unenforceable absent new consideration or unforeseen difficulties.
Question 5: A buyer orders 100 blue shirts. The seller ships 100 red shirts with a note stating, 'We are out of blue; sending red as an accommodation.' What is the legal effect of the shipment?
- It is a counteroffer, not an acceptance, so the seller is not in breach (Correct answer)
- It is an acceptance and a breach of contract
- It is a rejection that terminates all dealings
- It is an acceptance because shipment always accepts an offer
Correct answer: It is a counteroffer, not an acceptance, so the seller is not in breach
Under UCC 2-206, shipment of nonconforming goods with a seasonable notice of accommodation is a counteroffer rather than an acceptance and breach.
Question 6: An uncle promises his nephew $10,000 if the nephew refrains from drinking alcohol until age 25. The nephew complies fully. When the nephew turns 25, the uncle refuses to pay, arguing the nephew benefited from sobriety. Is there consideration?
- Yes, because the nephew's forbearance of a legal right is valid consideration (Correct answer)
- No, because the nephew received a personal benefit
- No, because forbearance is never consideration
- Yes, but only if the promise was notarized
Correct answer: Yes, because the nephew's forbearance of a legal right is valid consideration
Forbearance from exercising a legal right, when bargained for, constitutes valid consideration even if the promisee also benefits.
Question 7: A seller contracts to deliver custom machinery by June 1. On May 1, the seller tells the buyer, 'I will not be delivering; find another supplier.' What may the buyer do immediately?
- Treat the statement as an anticipatory repudiation and sue for breach at once (Correct answer)
- Wait until June 1 and only then declare breach, with no other option
- Do nothing because repudiation must be in writing
- Rescind only if the seller files for bankruptcy
Correct answer: Treat the statement as an anticipatory repudiation and sue for breach at once
An unequivocal statement of intent not to perform before performance is due is an anticipatory repudiation, allowing the aggrieved party to sue immediately.
CO Bar Contracts and Sales 2
A merchant emails another merchant: 'I offer to sell you 500 widgets at $10 each.
This offer will remain open for 10 days.' Three days later, before any acceptance, the offeror emails a revocation.
Under UCC Article 2, is the revocation effective?