Contracts and Sales Flashcards

A Maryland retailer emails a wholesaler: "Will sell you 500 widgets at $10 each, offer firm for 10 days." Both are merchants and the email is signed. On day 5, the wholesaler tries to accept, but the retailer had revoked on day 3. Is a contract formed?

Answer: Yes, because a signed merchant's firm offer under UCC 2-205 is irrevocable for the stated period

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.

A homeowner promises to pay a landscaper $5,000 for work the landscaper voluntarily completed last month. The landscaper sues when the homeowner refuses to pay. What is the homeowner's best defense?

Answer: The promise lacks consideration because past consideration is not valid consideration

A promise made in exchange for services already performed is supported only by past consideration, which is generally insufficient to form a contract.

Buyer and Seller sign a written contract for the sale of land containing a merger clause. Buyer later claims Seller orally promised, before signing, to repave the driveway. Under the parol evidence rule, may Buyer introduce this oral promise?

Answer: No, because a fully integrated agreement bars evidence of prior oral terms that contradict or supplement it

A merger clause indicates full integration, and the parol evidence rule excludes prior or contemporaneous oral terms offered to supplement or contradict a fully integrated writing.

A contractor agrees to build a deck for $20,000. Midway through, the contractor demands $5,000 more due to rising lumber costs, and the homeowner agrees. Under common law, is the modification enforceable?

Answer: No, unless supported by new consideration or unanticipated circumstances making it fair and equitable

Under the common law pre-existing duty rule, a modification requires new consideration unless fair and equitable in light of unanticipated circumstances.

A merchant buyer sends a purchase order for goods, and the merchant seller responds with a confirmation adding an arbitration clause. Neither form limits acceptance to its own terms and the buyer does not object. Under UCC 2-207, is the arbitration clause part of the contract?

Answer: It becomes part of the contract unless it materially alters the agreement or the buyer objects within a reasonable time

Between merchants, additional terms in an acceptance become part of the contract unless they materially alter it, the offer limits acceptance to its terms, or objection is made; arbitration clauses are often held to be material alterations.

A buyer contracts to purchase a rare painting for $50,000. The seller repudiates before delivery. Which remedy is the buyer most likely to obtain?

Answer: Specific performance, because the painting is unique and money damages are inadequate

Specific performance is available for the sale of unique goods, such as rare artwork, where legal damages are inadequate.

An uncle promises his nephew $10,000 if the nephew graduates from law school. Relying on this, the nephew enrolls and incurs debt, but the uncle revokes before graduation. What is the nephew's best theory of recovery if consideration is found lacking?

Answer: Promissory estoppel, because he reasonably and foreseeably relied to his detriment

Promissory estoppel permits enforcement of a promise where the promisor should reasonably expect reliance, the promisee relies to his detriment, and injustice can be avoided only by enforcement.