MD Bar Contracts and Sales 3

Question 1

A Maryland farmer orally agrees to sell 1,000 bushels of wheat for $8,000.
The buyer sends a signed written confirmation, and the farmer, a merchant, does not object within 10 days.
The farmer later refuses to deliver, citing the statute of frauds.
Who prevails?

Accepted Answer

The buyer, because the merchant confirmation exception satisfies the statute of frauds against the farmer

Answer

The farmer, because he never signed any writing

Answer

The farmer, because oral contracts for goods over $500 are void

Answer

The buyer, but only if he can show part performance

Question 2

A wedding venue contract requires a $10,000 payment if the couple cancels, regardless of when cancellation occurs. The couple cancels a year in advance and the venue rebooks the date at full price. The couple challenges the $10,000 provision. How should a court rule?

Accepted Answer

The provision is an unenforceable penalty because it is not a reasonable forecast of actual or anticipated harm

Answer

The provision is enforceable because parties may freely agree to liquidated damages

Answer

The provision is enforceable because the venue suffered inconvenience

Answer

The provision is void because cancellation clauses violate public policy

Question 3

Seller ships nonconforming goods to Buyer, who accepts them without inspection. Two weeks later, Buyer discovers a latent defect substantially impairing their value. What may Buyer do?

Accepted Answer

Revoke acceptance within a reasonable time, because the defect was difficult to discover and substantially impairs value

Answer

Nothing, because acceptance is always final

Answer

Reject the goods under the perfect tender rule

Answer

Sue only for fraud, because acceptance waives all warranty claims

Question 4

A general contractor uses a subcontractor's bid to compute its own winning bid on a project. The subcontractor then refuses to honor its bid. What doctrine best allows the general contractor to enforce the bid?

Accepted Answer

Promissory estoppel, making the sub-bid irrevocable due to foreseeable reliance

Answer

The mailbox rule, because the bid was accepted upon dispatch

Answer

Unilateral contract, because using the bid was full performance

Answer

Novation, because the sub was substituted into the prime contract

Question 5

A contract requires a singer to perform at a concert hall on June 1. The hall burns down through no one's fault on May 20. The promoter sues the singer's agent for refusing alternate arrangements. What doctrine excuses performance?

Accepted Answer

Impossibility (impracticability), because destruction of the essential venue makes performance objectively impossible

Answer

Frustration of purpose, because the singer no longer wishes to perform

Answer

Anticipatory repudiation by the concert hall

Answer

Mutual mistake as to the hall's condition at formation

Question 6

Buyer contracts to buy 100 laptops at $500 each. Seller breaches, and Buyer reasonably purchases substitute laptops at $600 each. What are Buyer's direct damages under the UCC?

Accepted Answer

$10,000, the difference between the cover price and the contract price

Answer

$50,000, the full contract price

Answer

$60,000, the full cover price

Answer

Nothing, because Buyer obtained the goods elsewhere

Question 7

A debtor owes a creditor $10,000, undisputed and due. The debtor sends a check for $6,000 marked "payment in full," which the creditor cashes. May the creditor sue for the remaining $4,000?

Accepted Answer

Yes, because there is no valid accord and satisfaction when the debt is liquidated and undisputed

Answer

No, because cashing the check accepted the accord

Answer

No, because the notation created a novation

Answer

Yes, but only if the creditor returns the $6,000 first