FYLSX Contracts Formation & Enforcement 2 — Questions and Answers
Question 1: Under the UCC, a merchant's firm offer is irrevocable for up to how long even without consideration?
- 30 days
- 3 months (Correct answer)
- 6 months
- 1 year
Correct answer: 3 months
UCC § 2-205 makes a merchant's signed, written firm offer irrevocable for the stated period or a reasonable time, but no longer than three months.
Question 2: Alice mails an acceptance on Monday. Bob mails a revocation on Tuesday. The revocation arrives Wednesday; the acceptance arrives Thursday. Is a contract formed?
- No, because the revocation arrived before the acceptance.
- Yes, because acceptance was effective upon dispatch under the mailbox rule. (Correct answer)
- No, because the offer was revoked before acceptance arrived.
- Yes, but only if Bob had prior notice of Alice's acceptance.
Correct answer: Yes, because acceptance was effective upon dispatch under the mailbox rule.
Under the mailbox rule, acceptance is effective upon dispatch, so the contract was formed Monday when Alice mailed her acceptance—before the revocation was even sent.
Question 3: Which doctrine prevents enforcement of a contract term that is oppressive and results from unequal bargaining power?
- Promissory estoppel
- Unconscionability (Correct answer)
- Duress
- Frustration of purpose
Correct answer: Unconscionability
Unconscionability, recognized under UCC § 2-302 and common law, allows courts to refuse to enforce grossly unfair terms that result from unequal bargaining positions.
Question 4: Tom promises to pay his nephew $5,000 if the nephew quits smoking for one year. The nephew quits and completes the year. Which element makes this promise enforceable?
- Moral obligation
- Past consideration
- Forbearance from a legal right as consideration (Correct answer)
- Illusory promise
Correct answer: Forbearance from a legal right as consideration
The nephew's forbearance from his legal right to smoke constitutes valid consideration, making the uncle's promise enforceable.
Question 5: A contract is silent on price. Under the UCC, what price term is implied?
- The seller's listed price at time of shipment
- A reasonable price at the time of delivery (Correct answer)
- The buyer's last paid price for similar goods
- No contract exists without a price term
Correct answer: A reasonable price at the time of delivery
UCC § 2-305 allows a contract to be formed without a set price, implying a reasonable price at the time of delivery.
Question 6: Which of the following is NOT a required element for a valid written contract under the Statute of Frauds for the sale of goods over $500?
- A writing signed by the party to be charged
- The quantity of goods
- The price of the goods (Correct answer)
- A description of the parties
Correct answer: The price of the goods
Under UCC § 2-201, only the quantity term is essential to satisfy the Statute of Frauds for goods contracts; price and description of parties are not required in the writing.
Question 7: Dan offers to sell his car to Sue for $8,000, saying 'this offer is open for one week.' Dan revokes the offer after three days. Sue attempts to accept on day five. Is there a contract?
- Yes, because Dan promised to keep the offer open for a week.
- No, because an offer can be revoked any time before acceptance unless supported by consideration. (Correct answer)
- Yes, because Sue relied on the offer.
- No, because five days is beyond a reasonable time.
Correct answer: No, because an offer can be revoked any time before acceptance unless supported by consideration.
Without consideration or a signed firm offer (merchant rule), an offer is revocable at any time before acceptance, even if the offeror promised to keep it open.
FYLSX Contracts Formation & Enforcement 2
Under the UCC, a merchant's firm offer is irrevocable for up to how long even without consideration?