DE Bar Contracts and Sales 3 — Questions and Answers
Question 1: A general contractor uses a subcontractor's bid to win a project, but the subcontractor revokes before the contractor can accept. What doctrine best allows the contractor to enforce the bid?
- Promissory estoppel (Correct answer)
- The mailbox rule
- The parol evidence rule
- Accord and satisfaction
Correct answer: Promissory estoppel
Under Drennan v. Star Paving, promissory estoppel binds a subcontractor whose bid the general contractor foreseeably and detrimentally relied upon.
Question 2: A seller delivers 100 units, but 10 are defective, under a single-delivery contract. The buyer wants to reject the entire shipment. Which UCC doctrine governs?
- The perfect tender rule, allowing rejection of the whole, part, or acceptance of any commercial units (Correct answer)
- Substantial performance, requiring acceptance of the shipment
- Cure, which bars any rejection
- Impracticability, excusing the defect
Correct answer: The perfect tender rule, allowing rejection of the whole, part, or acceptance of any commercial units
UCC 2-601's perfect tender rule lets the buyer reject all, accept all, or accept any commercial units when the tender fails to conform in any respect.
Question 3: A farmer contracts to sell crops from a specific field, but a flood destroys the entire field before harvest. What is the likely result?
- The farmer is excused under impracticability because identified goods were destroyed without fault (Correct answer)
- The farmer must buy substitute crops on the open market
- The buyer may recover consequential damages for non-delivery
- The contract converts to an option contract
Correct answer: The farmer is excused under impracticability because identified goods were destroyed without fault
When goods identified at contracting are destroyed without either party's fault, UCC 2-613 and impracticability principles excuse performance.
Question 4: A written contract states it is the complete and final agreement of the parties. The buyer offers testimony of a prior oral warranty. How should the court rule?
- Exclude the testimony because a fully integrated writing bars prior contradictory or supplemental terms (Correct answer)
- Admit the testimony because oral warranties always survive
- Admit the testimony only if the buyer is a consumer
- Exclude the testimony only if the seller objects in writing
Correct answer: Exclude the testimony because a fully integrated writing bars prior contradictory or supplemental terms
The parol evidence rule bars evidence of prior agreements that contradict or supplement a fully integrated written contract.
Question 5: A debtor owes $10,000 on an undisputed, liquidated debt. The creditor agrees to accept $7,000 as full payment, and the debtor pays. May the creditor later sue for the remaining $3,000?
- Yes, because part payment of a liquidated debt is not consideration for discharging the balance (Correct answer)
- No, because the creditor accepted the payment
- No, because accord and satisfaction always discharges debts
- Yes, but only if the debtor acted in bad faith
Correct answer: Yes, because part payment of a liquidated debt is not consideration for discharging the balance
Under the pre-existing duty rule, paying less than an undisputed liquidated debt provides no consideration to discharge the remainder.
Question 6: A buyer under an installment contract receives one non-conforming installment. When may the buyer cancel the entire contract?
- Only when the non-conformity substantially impairs the value of the whole contract (Correct answer)
- Whenever any installment fails perfect tender
- Only if the seller refuses to give assurances
- Never, because installment contracts cannot be cancelled
Correct answer: Only when the non-conformity substantially impairs the value of the whole contract
UCC 2-612 permits cancellation of an installment contract only when a default substantially impairs the value of the whole contract.
Question 7: A minor purchases a car, uses it for six months, and then seeks to disaffirm the contract. What is the general common law result?
- The minor may disaffirm and recover payments, returning the car in its current condition (Correct answer)
- The minor is bound because the car was used
- The minor must pay full fair market value for the use
- Disaffirmance is barred after 30 days of use
Correct answer: The minor may disaffirm and recover payments, returning the car in its current condition
A minor may disaffirm a contract for non-necessaries and generally need only return the goods in whatever condition they remain.
DE Bar Contracts and Sales 3
A general contractor uses a subcontractor's bid to win a project, but the subcontractor revokes before the contractor can accept.
What doctrine best allows the contractor to enforce the bid?