OK Bar Contracts and Sales 2 — Questions and Answers
Question 1: A merchant emails a signed offer to sell 500 widgets at $10 each, stating the offer will remain open for 30 days. Ten days later, before the buyer accepts, the merchant revokes. Under the UCC, is the revocation effective?
- No, because a signed merchant firm offer 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 are revocable at any time before acceptance
- No, but only if the buyer detrimentally relied on the offer
Correct answer: No, because a signed merchant firm offer is irrevocable for the stated period up to three months
UCC 2-205 makes a signed written offer by a merchant giving assurance it will be held open irrevocable without consideration for the stated time, up to three months.
Question 2: A homeowner promises to pay a painter $5,000 after the painter has already finished painting the house as a volunteer. Is the homeowner's promise enforceable under traditional contract principles?
- Yes, because the painter conferred a measurable benefit
- No, because past consideration is not valid consideration (Correct answer)
- Yes, because moral obligation always supports a promise
- No, because the promise was not in writing
Correct answer: No, because past consideration is not valid consideration
A promise made in exchange for a benefit already conferred is supported only by past consideration, which is generally insufficient to form a contract.
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 contradicts the price term. Under the parol evidence rule, the evidence is:
- Admissible, because oral agreements always supplement writings
- Admissible, because price is a negotiable term
- Inadmissible, because prior agreements contradicting a fully integrated writing are barred (Correct answer)
- Inadmissible, only if the seller objects at trial
Correct answer: Inadmissible, because prior agreements contradicting a fully integrated writing are barred
The parol evidence rule bars prior or contemporaneous agreements that contradict the terms of a fully integrated written contract.
Question 4: A contractor agrees to build a barn for $50,000. Midway through, the contractor demands an extra $10,000 to finish, citing no new circumstances, and the owner agrees. At common law, is the modification enforceable?
- Yes, because the parties mutually assented to it
- Yes, because modifications need no consideration
- No, because the contractor had a pre-existing duty to complete the work (Correct answer)
- No, because construction contracts cannot be modified orally
Correct answer: No, because the contractor had a pre-existing duty to complete the work
Under the common law pre-existing duty rule, a promise to pay more for a duty already owed lacks consideration and is unenforceable.
Question 5: A buyer orders 100 chairs and the seller ships 100 chairs of a different model without any explanation. Under the UCC, the seller's shipment of nonconforming goods constitutes:
- A counteroffer that the buyer may accept or reject
- Both an acceptance of the offer and a breach of the contract (Correct answer)
- An accommodation that discharges the seller
- A rejection of the buyer's offer
Correct answer: Both an acceptance of the offer and a breach of the contract
Under UCC 2-206, shipping nonconforming goods without noting an accommodation is simultaneously an acceptance and a breach.
Question 6: An uncle promises his nephew $10,000 if the nephew refrains from smoking until age 25. The nephew complies. Which doctrine best supports enforcement?
- Bargained-for consideration, because forbearance of a legal right is consideration (Correct answer)
- Promissory estoppel, because the nephew relied to his detriment
- Quasi-contract, because the uncle was unjustly enriched
- Moral obligation, because family promises are binding
Correct answer: Bargained-for consideration, because forbearance of a legal right is consideration
Forbearance from a legal right, such as smoking, is valid bargained-for consideration under the classic Hamer v. Sidway rule.
Question 7: A seller repudiates a contract to deliver custom machinery six months before performance is due. What may the buyer do immediately?
- Nothing until the performance date arrives
- Only demand adequate assurance of performance
- Treat the repudiation as a breach and sue immediately, or await performance (Correct answer)
- Rescind the contract but forfeit all damages
Correct answer: Treat the repudiation as a breach and sue immediately, or await performance
Anticipatory repudiation allows the nonbreaching party to sue immediately, suspend performance, or await the performance date.
OK Bar Contracts and Sales 2
A merchant emails a signed offer to sell 500 widgets at $10 each, stating the offer will remain open for 30 days.
Ten days later, before the buyer accepts, the merchant revokes.
Under the UCC, is the revocation effective?