UT Bar Contracts and Sales 3 — Questions and Answers
Question 1: A famous portrait painter contracts to paint a client's portrait but dies before beginning the work. What is the effect on the contract?
- The contract is discharged by impossibility because personal services by a unique performer cannot be delegated (Correct answer)
- The painter's estate must hire a substitute painter
- The client may compel specific performance against the estate
- The contract remains binding and the estate is liable for full expectation damages
Correct answer: The contract is discharged by impossibility because personal services by a unique performer cannot be delegated
Death of a party whose unique personal performance is essential discharges the contract through impossibility.
Question 2: A buyer contracts to purchase a rare vintage car. Before delivery, the seller sells the car to a third party who takes in good faith. What is the buyer's most likely remedy?
- Money damages for breach, since the car is now in the hands of a good-faith purchaser (Correct answer)
- Replevin against the good-faith purchaser
- Specific performance compelling return of the car
- Rescission of the third-party sale
Correct answer: Money damages for breach, since the car is now in the hands of a good-faith purchaser
Specific performance is generally unavailable once unique goods pass to a good-faith purchaser, leaving the buyer to damages.
Question 3: A wholesaler and retailer exchange forms; the retailer's acceptance adds an arbitration clause. Both parties are merchants and neither form limits acceptance to its own terms. Under UCC 2-207, does the arbitration clause become part of the contract?
- It becomes part of the contract unless it materially alters the agreement or is objected to (Correct answer)
- It never becomes part of any contract
- It always becomes part of the contract between merchants
- It converts the acceptance into a counteroffer
Correct answer: It becomes part of the contract unless it materially alters the agreement or is objected to
Between merchants, additional terms in an acceptance become part of the contract unless they materially alter it, the offer limits acceptance, or objection is made.
Question 4: An uncle promises his nephew $10,000 if the nephew refrains from smoking and drinking until age 25. The nephew complies fully. Is the uncle's promise supported by consideration?
- Yes, because the nephew's forbearance of a legal right is valid consideration (Correct answer)
- No, because refraining from bad habits benefits the nephew
- No, because family promises are unenforceable
- Yes, but only if the nephew suffered economic loss
Correct answer: Yes, because the nephew's forbearance of a legal right is valid consideration
Forbearance from exercising a legal right, as in Hamer v. Sidway, constitutes valid consideration regardless of benefit to the promisee.
Question 5: A contract requires a farmer to deliver 1,000 bushels of wheat 'from the farmer's north field.' A flood destroys the entire north field crop without the farmer's fault. What is the farmer's best defense to a breach claim?
- Impracticability, because the agreed source of the goods was destroyed without fault (Correct answer)
- Mistake, because both parties misjudged the weather
- Frustration of purpose, because the buyer no longer needs wheat
- Unconscionability, because performance is now expensive
Correct answer: Impracticability, because the agreed source of the goods was destroyed without fault
Destruction of the contractually specified source of goods without fault excuses performance under the doctrine of impracticability.
Question 6: A buyer accepts delivered machinery, then discovers a latent defect substantially impairing its value that was difficult to detect. What may the buyer do under the UCC?
- Revoke acceptance within a reasonable time after discovering the defect (Correct answer)
- Nothing, because acceptance is always final
- Reject the goods, because rejection remains available indefinitely
- Demand triple damages for the hidden defect
Correct answer: Revoke acceptance within a reasonable time after discovering the defect
UCC 2-608 permits revocation of acceptance when a defect substantially impairs value and was not reasonably discoverable at acceptance.
Question 7: A debtor owes a creditor an undisputed, liquidated debt of $10,000. The debtor sends a check for $6,000 marked 'payment in full,' and the creditor cashes it. Under the common law, is the remaining $4,000 discharged?
- No, because payment of a lesser amount on an undisputed liquidated debt lacks consideration for discharge (Correct answer)
- Yes, because cashing the check constitutes accord and satisfaction
- Yes, because the notation controls regardless of the debt's nature
- No, because checks can never discharge debts
Correct answer: No, because payment of a lesser amount on an undisputed liquidated debt lacks consideration for discharge
Accord and satisfaction requires a good-faith dispute; part payment of a liquidated, undisputed debt provides no consideration to discharge the balance.
UT Bar Contracts and Sales 3
A famous portrait painter contracts to paint a client's portrait but dies before beginning the work.
What is the effect on the contract?