MI Bar Contracts and Sales 3 — Questions and Answers
Question 1: A seller ships nonconforming goods with a note stating they are offered only as an accommodation. What is the legal effect of the shipment?
- It is both an acceptance and a breach
- It is a counteroffer that the buyer may accept or reject (Correct answer)
- It is an acceptance of the original offer
- It is a rejection that terminates all dealings
Correct answer: It is a counteroffer that the buyer may accept or reject
An accommodation shipment under UCC 2-206 is a counteroffer, not an acceptance, so there is no breach.
Question 2: A written contract for services contains a merger clause. The buyer offers evidence of a prior oral agreement that directly contradicts a term of the writing. Is the evidence admissible?
- Yes, because oral agreements always supplement writings
- No, because the parol evidence rule bars prior agreements that contradict a fully integrated writing (Correct answer)
- Yes, if the oral agreement was made first
- No, unless the contract involves goods over $500
Correct answer: No, because the parol evidence rule bars prior agreements that contradict a fully integrated writing
The parol evidence rule bars prior or contemporaneous agreements that contradict a fully integrated written contract.
Question 3: A farmer contracts to sell his entire wheat crop, but an unprecedented flood destroys the identified crop. Which doctrine most likely excuses performance?
- Frustration of purpose
- Impracticability due to destruction of goods identified when the contract was made (Correct answer)
- Mutual mistake
- Anticipatory repudiation
Correct answer: Impracticability due to destruction of goods identified when the contract was made
Destruction of goods identified at contract formation without fault excuses the seller under UCC 2-613 and impracticability principles.
Question 4: A 17-year-old buys a car, continues driving it for a year after turning 18, and makes payments. Can she later disaffirm the contract?
- Yes, minors can disaffirm at any time
- No, because her conduct after reaching majority ratified the contract (Correct answer)
- Yes, but only within four years
- No, because car purchases are necessaries
Correct answer: No, because her conduct after reaching majority ratified the contract
Continuing to use the car and pay after reaching majority constitutes ratification, barring disaffirmance.
Question 5: A debtor owes an undisputed $10,000 debt and sends a check for $6,000 marked 'payment in full,' which the creditor cashes. Is the balance discharged?
- Yes, cashing the check is always an accord and satisfaction
- No, because there is no accord and satisfaction where the debt is undisputed and liquidated (Correct answer)
- Yes, under the UCC good-faith rule
- No, unless the creditor protests in writing
Correct answer: No, because there is no accord and satisfaction where the debt is undisputed and liquidated
Accord and satisfaction requires a genuine dispute; part payment of a liquidated, undisputed debt is not consideration for discharging the balance.
Question 6: A buyer under an installment contract receives one nonconforming installment. When may the buyer cancel the entire contract?
- Whenever any installment is nonconforming under the perfect tender rule
- Only when the nonconformity substantially impairs the value of the whole contract (Correct answer)
- Never, installment contracts cannot be cancelled
- Only if the seller fails to cure within 10 days
Correct answer: Only when the nonconformity substantially impairs the value of the whole contract
The perfect tender rule does not apply to installment contracts; cancellation requires substantial impairment of the whole contract under UCC 2-612.
Question 7: A landowner offers a reward of $1,000 to anyone who finds her lost dog. A neighbor finds and returns the dog without knowing about the reward. Under the majority rule, can the neighbor recover?
- Yes, because he performed the requested act
- No, because one cannot accept an offer of which one is unaware (Correct answer)
- Yes, under quasi-contract
- No, because rewards are illusory promises
Correct answer: No, because one cannot accept an offer of which one is unaware
Under the majority rule, acceptance of a unilateral offer requires knowledge of the offer at the time of performance.
MI Bar Contracts and Sales 3
A seller ships nonconforming goods with a note stating they are offered only as an accommodation.
What is the legal effect of the shipment?