OH Bar Contracts and Sales 2 — Questions and Answers
Question 1: A merchant emails another merchant: "I will sell you 500 widgets at $10 each, offer firm for 30 days." Ten days later, before acceptance, the seller revokes. Under UCC Article 2, is the revocation effective?
- No, because a signed firm offer by a merchant is irrevocable for the stated period up to three months (Correct answer)
- Yes, because no consideration was given to keep the offer open
- Yes, because firm offers require a separate signed writing apart from the offer itself
- No, because all offers between merchants are irrevocable for 90 days
Correct answer: No, because a signed firm offer by a merchant is irrevocable for the stated period up to three months
Under UCC 2-205, a merchant's signed writing giving assurance an offer will be held open is irrevocable without consideration for the stated time, not exceeding three months.
Question 2: A homeowner promises to pay a painter $5,000 for painting her house. After the painter finishes, the homeowner says, "I'll also give you a $500 bonus next week." She never pays the bonus. Is the bonus promise enforceable?
- No, because past consideration is not valid consideration (Correct answer)
- Yes, because the painter relied on the promise
- Yes, because it modified an existing contract in good faith
- No, because bonuses must be in writing under the Statute of Frauds
Correct answer: No, because past consideration is not valid consideration
A promise made in exchange for performance already completed lacks consideration because past consideration cannot support a new promise.
Question 3: A buyer and seller sign a fully integrated written contract for the sale of land. The buyer seeks to introduce evidence of a prior oral agreement that the seller would also remove an old barn. Is the evidence admissible?
- No, because the parol evidence rule bars prior agreements that contradict or supplement a fully integrated writing (Correct answer)
- Yes, because oral agreements are always admissible to explain a writing
- Yes, because the parol evidence rule applies only to sales of goods
- No, because the Statute of Frauds bars all oral evidence about land
Correct answer: No, because the parol evidence rule bars prior agreements that contradict or supplement a fully integrated writing
When a writing is a complete integration, the parol evidence rule bars evidence of prior or contemporaneous agreements offered to add to or vary its terms.
Question 4: A seller contracts to deliver 100 chairs by June 1. On May 15, the seller delivers 100 chairs, 10 of which are scratched. Under the UCC perfect tender rule, what may the buyer do?
- Reject the whole, accept the whole, or accept any commercial units and reject the rest (Correct answer)
- Only reject the entire shipment
- Only accept the shipment and sue for damages
- Nothing, because the defect is not material
Correct answer: Reject the whole, accept the whole, or accept any commercial units and reject the rest
Under UCC 2-601, if goods fail in any respect to conform, the buyer may reject all, accept all, or accept any commercial units and reject the rest.
Question 5: A general contractor uses a subcontractor's bid in computing its own bid on a project. After the general contractor wins the project, the subcontractor tries to revoke its bid. What is the general contractor's best theory to hold the subcontractor to the bid?
- Promissory estoppel making the bid irrevocable due to foreseeable reliance (Correct answer)
- The merchant firm offer rule
- An implied-in-law quasi-contract
- The mailbox rule
Correct answer: Promissory estoppel making the bid irrevocable due to foreseeable reliance
Under Drennan v. Star Paving, a subcontractor's bid is held open by promissory estoppel when the general contractor foreseeably and reasonably relies on it.
Question 6: A buyer contracts to buy a rare painting for $50,000. The seller repudiates and sells it to a third party. What remedy is the buyer most likely to obtain?
- Specific performance or replevin is unavailable against the good-faith purchaser, so damages measured by market price minus contract price (Correct answer)
- Specific performance against the third party regardless of good faith
- Punitive damages for bad-faith breach
- Rescission plus consequential damages only
Correct answer: Specific performance or replevin is unavailable against the good-faith purchaser, so damages measured by market price minus contract price
Once a unique good passes to a good-faith purchaser for value, the original buyer is generally limited to damages, typically market price minus contract price.
Question 7: An uncle promises his nephew $10,000 if the nephew refrains from drinking and smoking until age 21. The nephew complies. Is there consideration for the uncle's promise?
- Yes, because forbearance of a legal right is valid consideration (Correct answer)
- No, because the nephew benefited from healthy living
- No, because family promises are presumed gratuitous and unenforceable
- Yes, but only if the promise was in writing
Correct answer: Yes, because forbearance of a legal right is valid consideration
As in Hamer v. Sidway, giving up a legal right such as drinking or smoking is a bargained-for detriment constituting consideration.
OH Bar Contracts and Sales 2
A merchant emails another merchant: "I will sell you 500 widgets at $10 each, offer firm for 30 days." Ten days later, before acceptance, the seller revokes.
Under UCC Article 2, is the revocation effective?