PA Bar Contracts 2 — Questions and Answers
Question 1: Under Pennsylvania's adoption of UCC Article 2, a merchant's firm offer to buy or sell goods is irrevocable for up to how long without consideration?
- 30 days
- 3 months (Correct answer)
- 6 months
- 1 year
Correct answer: 3 months
Under 13 Pa. C.S. § 2205, a written, signed firm offer by a merchant is irrevocable for the time stated or, if no time is stated, for a reasonable time not to exceed three months.
Question 2: Pennsylvania courts measure damages for breach of a service contract primarily by:
- The cost of completion or the diminution in market value, whichever is less (Correct answer)
- Always the cost of completion regardless of cost
- Always the diminution in market value regardless of circumstances
- The contract price minus any payments already made
Correct answer: The cost of completion or the diminution in market value, whichever is less
Pennsylvania follows the general rule that damages for breach of a construction or service contract are the lesser of the cost of completion or the diminution in market value, preventing economic waste.
Question 3: Under Pennsylvania law, which doctrine allows a court to supply a missing contract term when the parties intended to be bound but overlooked a gap?
- Mutual mistake rescission
- Gap-filling under the UCC or common law implication (Correct answer)
- Accord and satisfaction
- Novation
Correct answer: Gap-filling under the UCC or common law implication
Pennsylvania courts fill gaps in contracts either through UCC gap-filler provisions for goods or through common law implication of reasonable terms when the parties clearly intended a binding agreement.
Question 4: Under Pennsylvania law, an anticipatory repudiation occurs when a party:
- Fails to make an installment payment that is due
- Clearly and unequivocally indicates before the performance date that it will not perform (Correct answer)
- Requests a modification of the contract
- Assigns its rights without consent
Correct answer: Clearly and unequivocally indicates before the performance date that it will not perform
Anticipatory repudiation requires a clear and unequivocal statement or conduct by one party before performance is due indicating that it will not perform its obligations.
Question 5: Pennsylvania's economic loss doctrine generally bars tort claims for:
- Personal injury caused by a defective product
- Pure economic losses in the absence of physical injury or property damage (Correct answer)
- Fraudulent misrepresentation in a commercial transaction
- Breach of fiduciary duty by a professional
Correct answer: Pure economic losses in the absence of physical injury or property damage
Pennsylvania's economic loss doctrine holds that a plaintiff cannot recover in tort for purely economic losses unaccompanied by physical injury or property damage when the losses are the subject of a contract.
Question 6: Under Pennsylvania law, the doctrine of impossibility of performance excuses a party's contractual obligation when:
- Performance becomes more expensive than anticipated
- An unforeseen event makes performance objectively impossible (Correct answer)
- The other party materially breaches first
- The contract was oral and cannot be proven
Correct answer: An unforeseen event makes performance objectively impossible
Pennsylvania recognizes impossibility of performance as an excuse when an unforeseen event makes performance objectively impossible — not merely more difficult or expensive — and the risk was not assumed by the party seeking excuse.
PA Bar Contracts 2
Under Pennsylvania's adoption of UCC Article 2, a merchant's firm offer to buy or sell goods is irrevocable for up to how long without consideration?