CONTRACTS MULTIPLE CHOICE

On May 31, Seller sends a written and signed offer in the mail to sell a property that Seller owns to Buyer for $100,000. The offer contains all of the relevant details needed for a sale of property. Buyer receives the offer on June 1. On the same day, Buyer mails to Seller a written and signed acceptance of Seller's offer. On June 2, Buyer changes his mind and sends a second signed letter by overnight mail to Seller rejecting the offer. On June 3, Seller receives Buyer's rejection letter. On June 4, Seller receives Buyer's acceptance letter. Which of the following is the most accurate statement of the legal rights of the parties? (A) No contract formed, because Seller received the rejection before the acceptance. (B) No contract formed, because Buyer's power of acceptance was terminated by the subsequent rejection. (C) A contract formed on June 1. (D) A contract formed on June 4 since rejections are not effective until there is confirmation.

(C) A contract formed on June 1.

Distributor is a food wholesaler whose customers are dining establishments. Restaurant sends a signed email to Distributor requesting a price quote for wild caught Alaskan salmon. Distributor is limiting the amount it sells to any individual customer, due to a recent shortage of salmon, and it replies to Restaurant that Distributor would sell up to 500 pounds of wild caught Alaskan salmon to Restaurant at the price of $10 a pound. The email listed various payment and delivery terms. Distributor's email ends with the statement: "This offer will be held open for 45 days after which it expires." Distributor signed the email. Twenty days later Restaurant emailed Distributor a signed purchase order for 1,000 pounds of wild caught Alaskan salmon at $10 a pound. The purchase order indicated that Restaurant agreed to all of the payment and delivery terms in Distributor's offer. Distributor replied that it would not ship any salmon to Restaurant. Restaurant brings a breach of contract claim against Distributor. Which of the following is the best statement of the outcome? (A) Distributor wins because Restaurant did not accept the terms of Distributor's offer. (B) Restaurant wins because Distributor's price quote was a merchant's firm offer that cannot be revoked for 45 days from the date of the offer. (C) Distributor wins because in the sale of goods under the UCC an option from a merchant to hold an offer open for over three months requires consideration. (D) Restaurant wins because Distributor's offer was certain and definite enough to determine an appropriate remedy.

(A) Distributor wins because Restaurant did not accept the terms of Distributor's offer.

Farmer decides to retire from farming. Employee, who had worked for Farmer for ten years, is interested in purchasing Farmer's tractor. The tractor is valued at $26,000, which is about the same amount as Employee earned in one year. Farmer intends to give Employee a bonus for the past year. After some discussion between the two parties, Farmer provides Employee with a signed writing that states, "In consideration of his long time employment, I promise to give my tractor to Employee." Farmer, however, later refuses to transfer title of the tractor to Employee. If Employee attempts to sue for breach of contract, which of the following is the most likely result? (A) Farmer wins, because there was no consideration for the bonus. (B) Farmer wins, because the fair market value of the tractor is greater than the reasonable bonus for an employee. (C) Employee wins, because courts do not inquire into the adequacy of consideration. (D) Employee wins, because the statute of frauds is satisfied.

(A) Farmer wins, because there was no consideration for the bonus.

A client enters into a signed and written agreement with a lawyer in which the lawyer promises to represent the client in a divorce proceeding in return for the client's promise to make one payment of $3,000 to be due when the divorce is granted. The agreement—drafted by the lawyer—provides that the lawyer will make all of necessary court appearances, file all necessary paperwork, and otherwise do all of the legal work necessary until the court grants the divorce. The $3,000 is the lawyer's normal rate for the average divorce. The lawyer, however, miscalculated how much time it would take for this particular divorce. The fair market value of the legal services that the lawyer provided was $20,000. When the court grants the divorce, the client presents the lawyer with a check for $3,000. Will the lawyer be successful if he refuses the $3,000 check as full payment and instead sues the client for the fair market value of $20,000? (A) No, because there was a fully negotiated express contract between the lawyer and the client (B) Yes, because it would be inequitable for the lawyer to receive less than the full value of the services he rendered (C) No, unless the lawyer provides sufficient proof that his services would be valued at $20,000 (D) Yes, because there is gross disparity in the consideration

(A) No, because there was a fully negotiated express contract between the lawyer and the client

Seller is a manufacturer of beach umbrellas. On January 1, Seller sent the following signed email to Retail Store, "It is never too early to plan for the summer buying season. We are now offering a guaranteed discount price of $15 each on our beach umbrellas provided that you make a minimum order of 100 umbrellas. You must order the umbrellas by May 1; otherwise, this offer terminates." On April 30, Retail Store phoned Seller and told them that they wanted to purchase 100 umbrellas at the $15 price." Seller responded, "Sorry, but we ran out. You should have ordered earlier. You snooze, you lose." If Retail Store sues Seller for breach of contract what is the likely result? (A) Retail Store prevails because the offer was not revoked before acceptance. (B) Seller prevails because a Merchant's Firm Offer is only non-revocable for three months. (C) Retail Store prevails under the promissory estoppel exception to the Statute of Frauds. (D) Seller prevails because the Statute of Frauds is not satisfied since Retail Store did not send a signed writing.

(A) Retail Store prevails because the offer was not revoked before acceptance.

ToolKit, a manufacturing equipment company, sent a written "firm order proposal" to Forge IT, a manufacturing company, to sell four industrial machines used in Forge IT's factory for $8,000. The firm order proposal contained several pages of terms and conditions including a term disclaiming any warranties about the equipment, express or implied. Forge IT replied by sending a purchase order that contained identical terms and conditions to the firm order proposal with one exception. It included extensive warranties about the condition and performance of the equipment to be purchased. The purchase order also contained the following: "This purchase order is expressly made conditional on your assent to the additional or different terms contained herein." ToolKit received the purchase order but never replied to Forge IT. ToolKit simply shipped the ordered equipment with an invoice which Forge IT promptly paid. Nine months later, half of the machines experienced problems and Forge IT sued for breach of the warranties included in its purchase order. So far the court has ruled that: (1) the jurisdiction has adopted the decision in Roto-Lith, Ltd. v. F.P. Bartlett & Co., 297 F. 2d 497 (C.A. 1, 1962) as controlling, and (2) the presence of the quoted language in the purchase order means that a contract was not created by the exchange of the firm order proposal and purchase order. Based on the foregoing how is the court likely to resolve the dispute over the breach of warranty? (A) The court will likely rule that by shipping and invoicing for the goods, ToolKit accepted the counteroffer contained in Forge IT's purchase order and the included warranty provisions became part of the contract. (B) The court will likely rule that the proposal of Forge IT to amend the contract and include the warranties was not material or surprising and thus became part of the contract under UCC §2-207(2). (C) The court will rule the contract was formed by the purchase order, which was a "non-conforming acceptance," and therefore Forge IT accepted the terms of ToolKit which did not include any warranties. (D) The court will likely rule no contract was formed and the parties should return the payments and machines.

(A) The court will likely rule that by shipping and invoicing for the goods, ToolKit accepted the counteroffer contained in Forge IT's purchase order and the included warranty provisions became part of the contract.

Tenant and Landlord enter a written agreement for the rental of an office building for one year starting January 1 and ending December 31. The lease was highly negotiated and both parties were active in drafting provisions. The lease provides Tenant with an option to renew the lease provided that Tenant must give Landlord written notice to renew by "midnight November 1." At noon on November 1, Tenant provides Landlord with written notice to renew the lease. However, Landlord refuses to accept the notice stating that the meaning of "midnight" is the start of the day—not the end of the day. The literal and accurate dictionary definition of "midnight" is the start of the day. However, in common usage a large majority of people treat "midnight" as the end of the day even though they are technically wrong. Assume that Tenant brings a breach of contract suit against Landlord. The court makes a finding that "midnight" is an ambiguous term. Which of the following is the best and most accurate statement of the approach that a modern jurisdiction would take in interpreting the meaning of the word "midnight" in these circumstances? (A) The court would first try to determine the intent of the parties as to what they meant by "midnight." (B) A court must use the dictionary definition of "midnight" since the dictionary definition always represents the objective meaning. (C) A court would be bound to use the customary meaning of "midnight" given that the majority of people interpret the word differently than the dictionary definition. (D) Given the two reasonable interpretations of the meaning of midnight, the court would split the difference and find that "noon" on November 1 was a reasonable time by which Tenant should have exercised the option.

(A) The court would first try to determine the intent of the parties as to what they meant by "midnight."

Over the last thirty years, Farmer and Distributor have entered into many contracts for the sale of Farmer's crops to Distributor. Typically, the contract price was explicitly stated in the written agreement and had been whatever the market price was for the particular crop on the date of contract formation. This year, Farmer and Distributor, entered into a written contract for the sale of 1,000 bushels of corn; however, the written agreement did not contain a price. Additionally, the agreement did not include the time for delivery. Assume that the parties had a dispute and one of the parties attempted to avoid enforcement because of the missing terms. Which of the following statements is most accurate as to whether the court would imply the missing terms? (A) The court would imply both a reasonable time for delivery and a reasonable price. (B) The court would imply a reasonable time for delivery but would not imply a reasonable price. (C) The court would not imply a reasonable time for delivery and would not imply a reasonable price. (D) The court would not imply a reasonable time for delivery but would imply a reasonable price.

(A) The court would imply both a reasonable time for delivery and a reasonable price.

Uncle wants to make a binding promise to give Niece a gift of his $100,000 grandfather's clock when she turns 30 in two years. Uncle discusses the matter with Niece and they agree to make the promise look as if Niece has purchased the clock. Uncle provides Niece with a signed writing that states, "In consideration of $10 to be paid by Niece, I promise that when Niece reaches her thirtieth birthday I will convey to Niece my grandfather's clock.' Later, Uncle decides not to convey the grandfather clock to Niece. If Niece sues for breach of contract, what is the likely result? (A) Uncle will win, because the consideration promised by Niece was the pretense of a bargain. (B) Uncle will win, because his subsequent refusal to perform makes his original promise illusory. (C) Niece will win, because the promise is evidenced by a bargained-for exchange. (D) Niece will win, because courts generally will not inquire into the adequacy of consideration.

(A) Uncle will win, because the consideration promised by Niece was the pretense of a bargain.

Wendy is in the business of helping couples plan their weddings in return for a fee. Wendy's busiest month is June since this is when many people get married. On March 1, Wendy emailed Florist and asked, "Can you provide up to 5,000 white roses on June 1? If so, at what price?" Wendy included her address for the purposes of delivery. In a signed email on March 2, Florist replied, "Yes. I can provide that quantity with delivery at that date at your address. At those quantities, the price would be $1 a rose, guaranteed. In order to provide that quantity of roses, you must inform us of the exact number by April 15." On May 1, Wendy called Florist and said, "I am in real need for 4,000 white roses by June 1. Can you deliver?" Florist replied, "I am not sure we can deliver that quantity in your time frame. You should have called earlier." Wendy replied, "Do your best. I really need those flowers." On May 2, Wendy sent a signed email to Florist stating, "I accept your offer to sell me 4,000 white roses at a $1 per rose with delivery by June 1." Florist did not respond and did not send the flowers by June 1. Wendy then sued Florist for breach of contract. How would a court rule on the cause of action? (A) Wendy loses because Florist's offer lapsed before Wendy tried to accept. (B) Wendy loses because the UCC Statute of Frauds is not satisfied even though an oral contract formed. (C) Wendy wins since she accepted an offer made under the Merchant's Firm Offer rule. (D) Wendy wins since her May 2 email satisfies the Statute of Frauds requirement under the Merchant's Confirmatory Memo exception.

(A) Wendy loses because Florist's offer lapsed before Wendy tried to accept.

Cyrus is sitting on his rocking chair on his front porch one morning when Charlene drives up to his house. They have been friends and neighbors for years. Charlene says "Hey Cy, I painted my fence and have many cans of paint left over. If you will pay me $200, the cost of the paint, I promise to paint your fence for you right now." Cyrus's fence hasn't been painted in years and needs a new coat. Cyrus just keeps rocking in his chair and Charlene starts painting. Cyrus watches her paint the fence until she is about 90% finished. He then stands up and shouts "No thanks, I don't accept your offer to paint my fence. Leave now." If Charlene sues Cyrus for the $200, is a court likely to find they had formed a contract to paint the fence for $200? (A) Yes, Charlene made an offer and in this circumstance Cyrus's acceptance occurred by silence. (B) Yes, Charlene made an offer and between friends one can always presume acceptance by silence. (C) No, mere silence can never constitute acceptance of an offer. (D) No, Charlene never made an effective offer that is capable of acceptance.

(A) Yes, Charlene made an offer and in this circumstance Cyrus's acceptance occurred by silence.

Francis is the hiring manager for Bella Donna Restaurant. Tyrone often works as a part time waiter during shifts when the restaurant thinks it will have increased business. For the past two years this has happened 35 times. Each time Francis calls Tyrone and either says to him or leaves as a voicemail saying something similar to the following: "We could use you on Saturday night from 5:00 to midnight. If you want to work, show up before 5:00, work the shift, and we will pay you $6.00 an hour plus a proportionate share of tips that night." Tyrone, when he is able, arrives at the restaurant and either starts working or stops by Francis's office to say he is reporting for work. On February 12, Francis calls and leaves a message for Tyrone on his voicemail making the same offer for Valentine's Day. Tyrone never calls Francis back. Tyrone shows up on Valentine's Day and works from 5:00 to midnight. Francis has the night off so does not see Tyrone work. A few days later Tyrone calls Francis to ask when he can pick up his pay and share of the tips. Usually, Francis pays Tyrone a few days later after they have calculated his share of the tips. Francis says "Oh, I never heard back from you after I left my message, so I called Melanie who worked that night. We didn't really need you as a result, so I am not paying." Tyrone did see Melanie working but thought nothing of it as she sometimes works there on other occasions when he has worked. If Tyrone sues for his salary and proportionate share of tips, is a court likely to find that a contract has been formed? (A) Yes, Francis made a unilateral offer and Tyrone effectively accepted by rendering the required performance (B) Yes, Francis made an offer and due to their course of dealing, silence operates as acceptance. (C) No, Tyrone's acceptance is nullified since the offeree must notify the offeror of acceptance even if earlier silence is effective. (D) No, since Francis was not present to reject the proffered services on Valentine's Day, Tyrone's silence does not operate as acceptance.

(A) Yes, Francis made a unilateral offer and Tyrone effectively accepted by rendering the required performance

By signed writing, Seller and Buyer agree that Buyer will pay Seller a nonrefundable $1,000, and Seller, for two months, will hold open an offer to sell her a parcel of real property for the price of $1 million, which is the fair market value of the property. Buyer then pays Seller $1,000. One month later, Buyer tells Seller that Buyer wants to accept the offer and purchase the land. Buyer tenders a cashier's check for $1 million in accordance with the terms of the offer, but Seller refuses to convey title to the property. Is Seller in breach of contract? (A) Yes, because Seller sold Buyer an enforceable option to purchase the real estate (B) Yes, because an option for the sale of real estate requires no consideration (C) No, because the consideration from Buyer for the option is presumptively inadequate (D) No, because the Seller fails to provide consideration for the option

(A) Yes, because Seller sold Buyer an enforceable option to purchase the real estate

Nat and Odessa are friends. Nat says to Odessa, "I'd like you to be exposed to classical music. If you promise to attend tomorrow night's Chopin concert, I will reimburse you for your ticket." Odessa replied, "Yes, thank you. I'll go to the concert." Odessa paid for a ticket and attended the concert; however, Nat refused to reimburse her for the cost of her ticket. Has Nat breached a contractual promise? (A) Yes, because the consideration for Nat's promise is Odessa's promise (B) Yes, because the consideration for Nat's promise is Odessa's performance of attending the concert (C) No, because promises between friends are considered gratuitous (D) No, because Nat did not benefit from the exchange

(A) Yes, because the consideration for Nat's promise is Odessa's promise

A miner owns a silver mine. It is uncertain how much silver is contained in the mine, but the miner honestly thinks there could be as much as $60 million in silver. The miner borrows $500,000 from an investor to purchase equipment necessary to mine the silver. In a detailed and signed writing, the miner promises to pay the investor $20 million in return for his investment once the silver has been mined and sold. Is the $500,000 investment consideration for the future promise of $20 million? (A) Yes, because the investor's risk in losing the investment justifies receiving a greater reward (B) Yes, but the court should limit the return by determining the fair market return that an investment in a speculative silver mine should yield (C) No, because the disparity between the $500,000 investment and the $20 million payment renders the consideration nominal (D) No, because such gross disparity in value is absolute proof of fraud, duress, or unconscionability

(A) Yes, because the investor's risk in losing the investment justifies receiving a greater reward

A corporation that is in the business of running restaurants purchases an insurance policy to protect itself from accidents that might arise in the course of its business. Included in the policy, which was written exclusively by the insurance company, is a definition of "Insured Party." The definition is clear that it covers the corporation itself, its employees, and customers, but ambiguous on whether other parties, such as delivery persons, are covered if they are on the corporation's premises in the course of business and have an accident. In fact, one day a delivery person does have an accident on the premises of one of the corporation's restaurants, but the insurance company refused to pay on the claim. If the corporation sues the insurance company for breach of contract and wins, it is probably because of the legal doctrine of: (A) interpretation against the drafter. (B) misrepresentation. (C) unilateral mistake. (D) the objective view of contracts.

(A) interpretation against the drafter.

Antonio owns several expensive paintings. On August 1, a burglar breaks into his home and steals his most prized painting. On August 2, Antonio publicly offers a reward of $10,000 to the person who provides information that leads to the return of the painting. On August 3, Bruno, a detective, calls Antonio and says, "I accept your offer. I promise to put all of my efforts into getting your painting returned." Bruno spent a substantial amount of time trying to locate the painting, but was unsuccessful. On August 20, Christina, an art dealer, contacted Antonio and provided information about someone who tried to sell the painting to her. The police were able to use the information that Christina provided to capture the criminal and return the painting to Antonio on August 20. Which of the following statements is correct? (A) A bilateral contract formed between Antonio and Bruno. (B) A unilateral contract formed between Antonio and Christina. (C) Both Bruno and Christina formed contracts with Antonio. (D) Neither Bruno nor Christina formed a contract with Antonio since it was the police who performed by returning the painting.

(B) A unilateral contract formed between Antonio and Christina.

Builder is in the business of constructing modest homes. Owner owns a piece of property on which he wants to build a house. At the request of Owner, Builder prepares an offer to build a house on the property in return for $100,000. The offer provides all of the key specifications needed to build the house. In reviewing the offer, Owner says to Builder, "I would like to keep your offer under advisement. Would you consider making the following modifications for the same price?" Owner then added dozens of changes to the specifications. Builder realized that Owner would be difficult to work with and that Builder might lose money on this deal. After Owner added yet another proposed modification, Builder reached across the table, took the copy of his original offer from Owner, and tore it up in front of Owner. Builder said, "I don't think I can do this." Owner replied, "I accept your offer." Which of the following best expresses the legal relationship between the parties? (A) Owner's request for changes to the specification was a counteroffer that destroyed Owner's power of acceptance as to Builder's offer. (B) Builder's statement of uncertainty and ripping up of the offer was, in effect, a revocation of Builder's offer. (C) Owner formed a contract with Builder according to the terms of Builder's original offer. (D) Owner formed a contract with Builder that incorporates Owner's proposed terms.

(B) Builder's statement of uncertainty and ripping up of the offer was, in effect, a revocation of Builder's offer.

Store bought newspaper advertising that said, "SATURDAY SALE - ONE DAY ONLY! Men's Fashion Watches on sale for $1 each. Limited Quantity Available. Only 500 watches available." Buyer was the first person at the Store on Saturday. As soon as the Store opened, Buyer told a Store employee that she wanted to purchase all 500 of the Men's Fashion Watches. Store employee told Buyer that she could only purchase 10 of the watches. Buyer purchased 10 watches. Which of the following is the best statement regarding the legal rights and duties of the parties? (A) Buyer was an identified offeree who properly accepted Store's offer since she was the first person at the Store. (B) Buyer's statement is an offer and the Store employee had the power to accept or not. (C) Buyer made a unilateral mistake that voided the contract since he should have known that Store did not intend to sell all 500 watches to one person. (D) Store can refuse to perform since the total price of Buyer's contract is $500 which makes the agreement within the statute of frauds and there is no writing signed by the party to be charged.

(B) Buyer's statement is an offer and the Store employee had the power to accept or not.

Cleaner ran a cleaning service and ran advertisements in the local media stating, "I will clean any space that is 2,000 square feet or less for $250 no matter how dirty it is. Call now to accept this offer." The advertisement provided contact information for Cleaner. Owner owns an office building, and each floor measured exactly 2,000 square feet. Owner called Cleaner's phone number but got voicemail. Owner left the following message, "I accept your offer. If you can start cleaning tonight by 9:00pm and finish by tomorrow morning at 7:00am, I will pay you $300 per floor to clean each of the floors in my building." Owner provided the necessary details such as the building address and combination needed to unlock the doors. Owner then ended the voicemail saying, "You need not call back. Just show up and start working. I will pay." Cleaner received the voicemail and went to Owner's building that evening before 9:00pm, unlocked the doors, and started cleaning the first floor. Owner, who was working late, saw Cleaner and said, "Stop. I changed my mind. I don't want you to clean my building." Cleaner stopped working and later brought a breach of contract suit against Owner. Who will prevail in the lawsuit? (A) Cleaner, because Owner accepted Cleaner's offer by leaving a voicemail (B) Cleaner, because Owner's offer provides for acceptance by performance (C) Owner, because Cleaner never called back to accept Owner's offer (D) Owner, because Owner revoked before Cleaner promised to clean the building

(B) Cleaner, because Owner's offer provides for acceptance by performance

For years, the City had wanted to build a park in its center. On October 1, Diana, a prominent restaurateur, sends the following letter to the City Council. "I have lived in City all of my life and want to provide City with an opportunity to purchase property for a park at a very good price. To show my civic spirit and because I love this town, I offer to sell the property my restaurant is located on to City for $30,000—a price that is well below the fair market value. This offer is open until November 1. Sincerely, Diana" The restaurant property has a fair market value of $100,000. The City Council received the letter the following day. On October 15, Diana dies. Under Diana's will, her son Edward inherits all her property. Edward is also the executor of Diana's estate. The City Council knows that Edward is not as civic minded as Diana and will want to keep the restaurant property. The City Council quickly holds a meeting where they approve the purchase. The Council then sends an acceptance of Diana's offer to her address with a copy to Edward as executor of her estate. When Edward received the Council's acceptance, he wrote back to the Bergen City Council stating that as executor of Diana's estate, he would not sell the restaurant property for any less than the fair market value of $100,000. The City brings a breach of contract claim. What is the likely decision of the court and rationale? (A) Edward prevails as executor of Diana's estate because there was no consideration to keep the offer open. (B) Edward prevails as executor of the Diana's estate because the offer was revoked. (C) City prevails because the offer was made irrevocable through promissory estoppel. (D) City prevails because they accepted before the attempted revocation.

(B) Edward prevails as executor of the Diana's estate because the offer was revoked.

Hank owns a metal machine shop and is in the process of selling of the assets to Kent. Both parties are of equal bargaining power. The written contract included the following language: "The sale of the machine shop will include all of the shop's wrenches, screwdrivers, and other hand tools." In the machine shop, Hank has a display of antique wood working tools that his grandfather had given him. The antique wood working tools are not used to produce any products in the machine shop. Kent says that the term "and other hand tools" includes the antique woodworking tools. Hank contends that it does not. If the disagreement went to litigation and a court found in Hank's favor it is probably because of which of the following principles of contract interpretation? (A) Construction against the drafter. (B) Ejusdem Generis. (C) Consider the entire language of the contract. (D) Whether one of the parties ascribed a different meaning to the term.

(B) Ejusdem Generis.

An employer sends a computer programmer an email stating, "I am making you a job offer to hire you for a one year contract at a salary of $100,000 a year." The email provided all of the relevant employment terms, including the details of the programmer's duties, job title, benefits, etc. The email ended by stating, "This offer will remain open for 60 days. Write or call me to accept." The programmer replied to the email, stating, "That is a very interesting offer. Let me consider that over the next couple of months. Would you consider hiring me for two years at a salary of $90,000 a year?" The employer did not reply to the programmer's email. Within the 60-day period, the programmer called and told the employer that he accepted the employer's original offer. Which of the following is the most accurate characterization of the parties' communications? (A) The programmer's email is a counteroffer. (B) The programmer formed a contract with the employer when he called the employer within the 60-day period. (C) Since the programmer only accepted orally, the programmer could use the statute of frauds as a defense if he changed his mind and wanted out of the agreement. (D) The employer's silence to the programmer's email was an acceptance of the two-year proposed contract, and the programmer's subsequent phone call is a proposal for a modification.

(B) The programmer formed a contract with the employer when he called the employer within the 60-day period.

Dealer is a truck dealer. A trucking company sent a written and signed offer to Dealer offering to purchase ten trucks (model X100) for $500,000. The offer included delivery dates and payment terms. Dealer responded in a signed writing accepting the trucking company's offer. Before delivery of the trucks could be arranged, the trucking company sent Dealer an email that stated, "We made a clerical error in our original offer as to the model of trucks. We meant to order the X200 model trucks for a total of $500,000. Can we make that change?" Dealer responded in a signed writing and stated, "That's fine. We'll deliver ten model X200 trucks at the same price as agreed upon." However, on the date of delivery, Dealer only delivered model X100 trucks and refused to deliver the X200. Has Dealer breached the contract? (A) Yes, because a court would likely reform the contract on the grounds of the trucking company's unilateral mistake (B) Yes, because Dealer agreed to modify the contract in a signed writing (C) No, because the modification is subject to the statue of frauds writing requirement (D) No, because the trucking company provided no additional consideration for Dealer's promise to supply the X200 model

(B) Yes, because Dealer agreed to modify the contract in a signed writing

Professor Jordan is teaching in France for the current academic year. His house back in CollegeTown is vacant. While he is away, he thinks it is a good time to have his house repainted. He emails Mike, a painter that has done work around the neighborhood. The email states: "Dear Mike, I promise to pay you when I return from France $5,000 if you paint the exterior of my house at 123 Main Street with Sherwin-Williams Drizzle paint." Mike paints the house over the next few days. Since he knows the professor will not be back for a few weeks he decides to wait until he returns to seek payment. Jordan's neighbor texts a picture of the painted house to Jordan's phone (which works in France) with the message: "I saw Mike here. The new paint looks great!" Jordan sends an email to Mike after receiving the text that states: "I changed my mind. Forget about painting the house." Is a court likely to require Professor Jordan to pay Mike the $5,000? (A) Yes, once a requested performance is completed the contractual price is always due whether or not the professor ever receives notice of performance. (B) Yes, notwithstanding the fact that Mike never notified the professor of his acceptance, the professor learned of the performance by Mike before attempting to revoke the offer. (C) No, Professor Jordan revoked the offer prior to Mike communicating acceptance. (D) No, Mike did not exercise reasonable diligence in communicating his acceptance to Professor Jordan.

(B) Yes, notwithstanding the fact that Mike never notified the professor of his acceptance, the professor learned of the performance by Mike before attempting to revoke the offer.

Mi Lu offers to sell her vacation home to Henri Ghent. The offer is sent in the form of a contract to purchase real estate that includes all material terms and is signed by Lu. Upon receipt Ghent signs the contract and deposits it in the US mail addressed to Lu at the address listed in the contract. The next morning Ghent has second thoughts and takes a copy of the contract he had made before signing it and changes the purchase price by reducing it by 15%. He then signs this new version and brings it to the FedEx store and sends it to Lu overnight delivery. The next day Lu receives the second copy (with the reduced purchase price) and the day after that she receives the first copy Ghent sent in the mail. She notes the postmark on the mailed copy is a day prior to the date the FedEx package was sent. Lu calls Ghent and said she is holding him to the original contract and price, and he must perform. At this point does a contract exist between Lu and Ghent for the purchase of the vacation home at the original price? (A) Yes, once an offered contract is signed the acceptance is effective. (B) Yes, the acceptance was effective prior to the counteroffer and thus the contract was formed before the counteroffer became effective. (C) No, due to the battle of the forms provision in UCC §2-207, the written records contradict each other (one form shows a higher price and another a lower price) and therefore no contract was ever formed. (D) No, because Lu received the counteroffer before the acceptance, the counteroffer acted as a rejection and since Lu never accepted the counteroffer no contract was formed.

(B) Yes, the acceptance was effective prior to the counteroffer and thus the contract was formed before the counteroffer became effective.

Seller owns two bicycles—one old bicycle worth about $75 (Old Bike) and a new bicycle worth $200 (New Bike). Seller wants to sell the Old Bike and keep the New Bike. On a public street, Seller is seated on the New Bike, to which he has attached a sign, 'My bicycle for sale, $75.' Walking on the street, Buyer approaches Seller, who says, 'As the sign says, my bicycle is for sale; $75 takes it.' Buyer believes that Seller is offering for sale the very bicycle on which Seller sits. Buyer takes $75 from his pocket and says, 'I'll take it.' Buyer hands Seller the $75 and says, 'So, would you give it over to me please? I'll ride it away now.' Seller responds, 'Oh, no. I was referring not to this bicycle but to an older bicycle I have sitting in my garage.' The parties have contracted for the sale of: (A) the Old Bike sitting in Seller's garage. (B) the New Bike on which Seller is seated. (C) no bicycle, because there was not a meeting of the minds between the two parties. (D) no bicycle, because $75 would be considered too little money for a bicycle worth $200.

(B) the New Bike on which Seller is seated.

Zoe is moving across the country and wants to sell some of her things. Zoe sends an email to her friend Franco who she knows loves to read. The email reads, "I am thinking of selling all of my books (500 in total) for $1 a book. I offer to sell you any or all of my three bookshelves for $100 each." As soon as he received the email, Franco called Zoe and said, "I accept both of your offers. I will purchase all 500 of your books for $1 each. I will also purchase all three bookshelves for $100 each." What contract, if any, was formed? (A) A contract was formed for the sale of both the books and the three bookshelves. (B) No contract was formed because the transaction is within the statute of frauds, and Franco did not sign any writing. (C) A contract was formed for the sale of the three bookshelves but not the books. (D) No contract was formed for any item, because the parties did not agree on a delivery date or how payment would be made.

(C) A contract was formed for the sale of the three bookshelves but not the books.

On January 1, Accountant sent a letter to each of her clients offering to prepare their tax returns by April 15, the tax deadline. The letter stated the services that she was offering, the rates she charged, and a list of documents that she would need from the client to prepare the tax return. The letter stated, "If you want to hire me to do your taxes by April 15, then you must let me know and send me all of your tax documents by February 15." Laura is one of Accountant's clients and received Accountant's letter. On March 1, Laura called Accountant asking her to prepare her tax returns. Accountant replied, "I am not sure that I can do that. I needed your documents earlier, and I have many commitments between now and April 15." Laura sent Accountant by overnight mail copies of her tax documents and a signed letter that stated, "I accept your offer of January 1. Enclosed are copies of my tax documents. I look forward to having my taxes prepared by April 15." Accountant did not respond to Laura's letter and did not prepare Laura's taxes by April 15. Laura brings a breach of contract claim against Accountant. Which of the following is the most accurate statement about the outcome of Laura's lawsuit? (A) Laura will win, because Accountant did not unequivocally revoke her January 1 offer during the March 1 phone call. (B) Laura will win, because Accountant's offer was substantially accepted without material alteration by March 1. (C) Accountant will win, because Laura did not have the power of acceptance when she mailed her acceptance and tax documents. (D) Accountant will win, because although the parties formed a contract, Accountant can raise a statute of frauds defense.

(C) Accountant will win, because Laura did not have the power of acceptance when she mailed her acceptance and tax documents.

Casper was a longtime employee at MegaCorp. After working at the company for 25 years, MegaCorp told Casper, "Because you have been such a loyal employee for many years, MegaCorp promises that you will be provided with a monthly pension of $4,000 for the remainder of your life." Casper then retired and MegaCorp began making monthly payments. After five years, MegaCorp stopped making the monthly payments to Casper. What would be Casper's best legal theory of recovery if he sues MegaCorp for not making the payments: (A) MegaCorp breached an express unilateral contract that formed by Casper's retirement. (B) MegaCorp was unjustly enriched by Casper by his many years of service. (C) Casper relied to his detriment on MegaCorp's promise of a pension by retiring. (D) MegaCorp's promise of a monthly pension of $4,000 for life lacks consideration.

(C) Casper relied to his detriment on MegaCorp's promise of a pension by retiring.

On March 1, Olivia contacts Bob and expresses interest in having him install a swimming pool in her backyard. On March 3, Bob responds with a signed written offer to build the pool. In the offer Bob specifies price, timetable, and all other relevant details. As for scheduling, the offer provides that Bob will begin work on April 1 and complete it by April 15. He writes, 'I have only those 15 days in which to install your pool, and I can only install one pool at a time. I am full with commitments before and after that period. You have one week in which to respond.' On March 4, Olivia learns from her neighbor, Nancy, that Nancy and Bob have formed a contract for the installation of a swimming pool on Nancy's property, with Bob to begin on April 1 and finish by April 15. Immediately on that same day, March 4, Olivia sends a signed email to Bob, stating, 'I accept your March 3 offer.' In response Bob advises Olivia that his offer is no longer open—that he has committed April 1-April 15 to building another party's swimming pool. Olivia maintains that Bob is in breach of contract—that he made her an offer on March 3, gave her one week in which to accept, and that within one week she accepted. Has Bob breached a contract with Olivia? (A) Yes, because Olivia accepted the offer before Bob attempted to revoke it (B) Yes, because any revocation has to be heard directly from the offeror to be effective (C) No, because Olivia lost her power to accept Bob's offer on March 4 when Olivia's neighbor spoke with Olivia (D) No, because the power of acceptance of an offer typically terminates at the end of a conversation

(C) No, because Olivia lost her power to accept Bob's offer on March 4 when Olivia's neighbor spoke with Olivia

Matthew purchased an antique 1956 sports car, and was restoring it himself. It needed a great deal of mechanical work. Matthew's friend, Nadia, came by one day while Matthew was working on the car. Matthew was trying to loosen a bolt on the engine when something broke. Matthew looked at the car in dismay and said to Nadia, "I paid $10,000 for this car, but I don't think I will ever be able to get it to run properly." Then he laughed and said, "I am so thirsty, I would trade this car to you for the can of soda you are drinking." Nadia laughed too and said, "It's a deal." Nadia handed Matthew the can of soda, and Matthew took a drink from the soda. Matthew then said, 'I was joking, of course.' Nadia insists that the parties have a contract for the purchase and sale of the sports car in return for the can of soda. Is Nadia correct? (A) Yes, because Nadia formed a unilateral contract when she gave Matthew the soda (B) Yes, because Nadia formed a bilateral contract when she said "It's a deal" (C) No, because a reasonable person would understand that Matthew was joking (D) No, because the subjective intent of the offeror controls whether an offer has been made

(C) No, because a reasonable person would understand that Matthew was joking

Ana and Betty are roommates. Ana says to Betty, 'I am going to clean out the front closet today.' Betty responds, 'That's nice of you. In exchange, I'll clean out the back closet today.' Have Ana and Betty made enforceable promises to clean their respective closets? (A) Yes, because each party's promise served as consideration for the other party's promise (B) Yes, because together the two promises created a bargain (C) No, because neither party's promise was 'bargained for' (D) No, because neither party's promise confers a benefit on the other

(C) No, because neither party's promise was 'bargained for'

Get The Spirit (GTS) is a sporting goods store. Bernard, the buying representative for GTS contacts Sneak'in, a wholesaler of tennis and running shows, and asks them to send a proposal to purchase $10,000 worth of stock in varying sizes for the GTS store. Jennifer replies by sending a written "Offer to Sell" specified quantities of sports footwear for $10,000. The offer contains two pages of terms and conditions. Bernard replies with a GTS form "Purchase Order" that mirrors the quantities and prices of the footwear in Jennifer's offer. The purchase order has three pages of terms and conditions that are different from those of Sneak'in's offer. The first page of the GTS purchase order says in bold large type: "This acceptance of your offer is expressly made conditional on assent to the additional or different terms contained in this purchase order." Upon receipt of the purchase order, Jennifer has it reviewed by Sneak'in's in-house counsel, Miranda. She says that the additional and different terms contained in GTS' purchase order are unacceptable. Jennifer does not contact GTS and does not fulfill the order. Two weeks later Bernard calls Jennifer and asks when the ordered items will be delivered. Jennifer responds that they could not accept the purchase order and therefore rejected GTS' counteroffer. At this point, have GTS and Sneak'in formed a legally binding contract to purchase the specified quantities of footwear? (A) Yes, since the material terms (quantity and price) contained in the Offer to Sell and Purchase Order are mirror images of each other, a contract has been formed under UCC §2-207. (B) Yes, under UCC §2-207(1) the Purchase Order is an effective acceptance notwithstanding that it contains additional or different terms. (C) No, the Purchase Order is not an effective acceptance under UCC §2-207(1) and is therefore a counteroffer which has been rejected. (D) No, the Purchase Order and the Offer to Sell are not a mirror image of each other and therefore no contract is formed.

(C) No, the Purchase Order is not an effective acceptance under UCC §2-207(1) and is therefore a counteroffer which has been rejected.

Mariah met with George and said, "Will you promise to paint the outside of my vacation home for $4000, to be completed in two weeks?" Mariah owned two vacation homes, one in Fort Lauderdale and the other in West Palm Beach. The one in Fort Lauderdale is much smaller than the home in West Palm Beach, and Mariah meant her larger West Palm Beach home. In Mariah's presence George called his partner Denny and said "Mariah wants us to paint her vacation home in Fort Lauderdale for $4000. Given how small the place is, I think we can do it for that amount and get it done in a week. Do you agree with my assessment?" Denny agreed. After he hung up the phone, George says "Yes, I agree." Four days later, George calls Mariah and says: "I am on my way to Fort Lauderdale right now to paint your house." Mariah responds, "You agreed to paint my West Palm Beach house; that is the one I intended when I made my offer. George says there is no way he can complete that size house by the next week and he would have charged $8,000 if she had meant that house. Do Mariah and George have an agreement to paint her vacation house in West Palm Beach? (A) Yes, Mariah made an offer and since the offeror is the master of the offer her understanding of the vacation home to be the West Palm Beach house is determinative. (B) Yes, because an ambiguity in an offer is resolved against the offeree since the offeree has an opportunity to ask clarifying questions. (C) No, they have an agreement to paint the Fort Lauderdale house for $4,000 since the meaning understood by George is controlling. (D) No, an offer containing any ambiguity cannot be the basis of a contract.

(C) No, they have an agreement to paint the Fort Lauderdale house for $4,000 since the meaning understood by George is controlling.

Maria Burza lost an expensive gold watch. She placed an ad in the local newspaper that read: "Reward of $400 offered to the person that finds and returns to me at 125 Main Street my gold watch with initials MB and the date 6-3-82 engraved." Dr. Watson recently hosted a party in his apartment which Maria attended. When dusting an end table, he found the gold watch lying behind a large lamp. He immediately recognized it as Maria's due to the date and initials that he had seen previously. He does not read the local paper and did not see the above quoted ad that appeared in it the day prior to his finding the watch. On his way to return the watch he encountered his friend, Sherlock. Upon mentioning to Sherlock that he was returning Maria's watch that he had just found, Sherlock pulled out the prior day's paper and showed Watson the ad. Watson exclaimed with joy, "That is great as I could really use the reward." When he returned the watch, he told Maria about his encounter with Sherlock and learning of the reward. She replied that since he did not know about the reward when he found the watch, he did not accept her reward offer. She refuses to pay him the reward. If Watson were to sue Maria for the reward, what would be the likely outcome? (A) The court will find no contract was formed because the offer was not communicated to Watson at the time he began performance. (B) The court will find no contract was formed because advertisements are not offers. (C) The court will likely find a contract was formed because Watson learned of the offer before completing the requested performance. (D) The court will likely find a contract was formed because offers for unilateral contracts are formed once performance is begun and Watson began performance by finding the watch.

(C) The court will likely find a contract was formed because Watson learned of the offer before completing the requested performance.

A hotel is building a luxury hotel where the plans include an elaborate outdoor garden. The hotel engaged in a long negotiation with a landscaper to design and construct the garden according to a detailed list of written specifications by a certain date. In return for designing and constructing the garden, the hotel will pay the landscaper $500,000. The specifications list 100 different varieties of flowers to be planted. One of the 100 different varieties of flowers was for roses, however, the entry did not specify what color the roses should be. The number of rose bushes to be included occupies roughly the same amount of space as the other types of flowers. The hotel and landscaper sign the written agreement. Before construction begins, the hotel repudiates the contract. The landscaper brings a breach of contract claim. At trial, the hotel asserts as a defense that no contract ever formed because of the lack of certainty as to the color of the roses. Which of the following is the most likely result? (A) The hotel wins, because to be enforceable a contract must provide explicit detail on every duty. (B) The hotel wins, because the missing color term means that a court could not determine whether there was a breach. (C) The landscaper wins, because uncertainty as to incidental matters is unlikely to be fatal to the formation of the contract. (D) The landscaper wins, because color should always be left to the discretion of the designer.

(C) The landscaper wins, because uncertainty as to incidental matters is unlikely to be fatal to the formation of the contract.

Manufacturer makes high-end wooden tables out of teak. On January 2, Manufacturer and Distributor both sign a document in which Manufacturer promises to sell and Distributor promises to purchase an unspecified number of teak tables for the price of $2,000 per table. The delivery date is set at June 1 and, under the agreement, Manufacturer is responsible for all shipping charges. Additionally, Manufacturer provides a warranty that each table will be solid teak wood. Shortly after the document was signed, the price of teak wood rose sharply because of shortages; thereby, increasing Manufacturer's costs in producing the table. Manufacturer sends an email to Distributor stating that it would not go through with the sale unless Distributor agreed to pay $3,000 per table. Which of the following is the most accurate statement of the legal relationship between the parties? (A) Manufacturer can void the contract because it made a mistake at contract formation that the price of teak would remain stable. (B) Manufacturer can assert the excuse of impracticability to discharge its duty. (C) An enforceable contract exists because the terms are definite and certain and satisfied the Statute of Fraud. (D) No contract formed for lack of certainty.

(D) No contract formed for lack of certainty.

Ana and Betty are roommates. Ana says to Betty, 'I am going to clean out the front closet today.' Betty responds, 'That's nice of you. In exchange, I'll clean out the back closet today.' Have Ana and Betty made enforceable promises to clean their respective closets? (A) Yes, because each party's promise served as consideration for the other party's promise (B) Yes, because together the two promises created a bargain (C) No, because neither party's promise was 'bargained for' (D) No, because neither party's promise confers a benefit on the other

(D) No, because neither party's promise confers a benefit on the other

A city employee works for the Department of Animal Control, which is in charge of catching stray dogs and taking the animals to a facility to be euthanized. Before euthanizing the animals, the Department's policy is to attempt to find the owner of the animal and reunite them. One day a dog owner was accidentally separated from his dog. The owner posted notices of a reward of $5,000 for the return of his pet. The owner also notified the Department of Animal Control that the dog was lost. The city employee found the owner's dog. Because the owner had informed the Department of the missing animal, the employee was then able to contact the owner and return the dog. Can the city employee claim the $5,000 award? (A) Yes, but only if the city employee knew of the owner's offer for a reward before he returned the dog (B) Yes, because the city employee fully performed a unilateral contract (C) No, because returning the dog is inadequate consideration for $5,000 (D) No, because the city employee had a pre-existing duty to return the animal

(D) No, because the city employee had a pre-existing duty to return the animal

On May 9, an owner of an airplane and a mechanic enter a signed agreement under which the mechanic will rebuild the owner's airplane engine in return a payment of $30,000. Among other terms, the written agreement provides that (1) on or before May 15, the owner will pay the mechanic a 'first third' of the total fee, $10,000, and (2) on May 16, the mechanic will begin her work. The document's last paragraph provides that 'If at any time, in her sole discretion, the mechanic decides that she does not wish to perform the duties hereinabove described, then she need not do so.' On May 14, the owner advises the mechanic that he has decided not to have his engine rebuilt, that he will not pay the mechanic, and that the mechanic should not, therefore, begin her work. The mechanic responds, insisting that she stands ready to perform the work and that she expects to be paid for it. Does the mechanic have viable cause of action against the owner for breach of contract? (A) Yes, because the mechanic has to pay a cancellation fee (B) Yes, because the parties had reduced their contract to a total integration (C) No, because the terms are unconscionable (D) No, because the mechanic's promise to perform is illusory

(D) No, because the mechanic's promise to perform is illusory

A niece is enrolled to start college in the fall. Her aunt tells her, "I promise to give you $30,000 to help you pay tuition for your first year; however, I won't have the money until the end of your first semester. You can count on me; however, I will give you a check in December." Because of her aunt's promise, the niece defers the start of her freshman year until January. During the fall, the niece travels to Europe, where she stays at expensive hotels, eats at expensive restaurants, and spends her nights dancing at clubs. The niece charges $20,000 on her credit cards for the trip, expecting to be able to pay them off in December when her aunt gives her the money she promised. However, when the niece returns home, the aunt refuses to pay niece the $30,000. The niece brings a lawsuit against her aunt seeking the $30,000 that was promised. Will the niece recover any amount from the aunt? (A) Yes, for $30,000, the amount the aunt promised (B) Yes, but for only $20,000, the amount the niece relied to her detriment on the aunt's promise (C) Yes, because the niece's trip to Europe was consideration for the aunt's promise (D) No, because the niece's actions were not reasonably foreseeable

(D) No, because the niece's actions were not reasonably foreseeable

Linda's Steak and Seafood (LSS) has a contract with USA Foods to supply her restaurant with meat. The five-year contract was signed 3 years ago. USA Foods promises to sell meat ordered by LSS and LSS promises to pay the current published price of USA Foods at the time of order for all meat ordered. Over 3 years, LSS has placed 58 orders for "USDA Prime Chopped Sirloin." On 33 occasions when it was not possible to fulfill the quantity of LSS's order with Prime beef, USA Foods substituted "USDA Choice Chopped Sirloin." Upon delivery USA Foods substituted the original invoice including "USDA Prime" for a new invoice reflecting the "USDA Choice" and the lower price per pound. On each of these occasions, LSS accepted the "USDA Choice" meat and paid the invoice without any objection or complaint. The contract, which is a final, fully integrated agreement between USA Foods and LSS, says nothing about the ability of USA Foods to make any substitutions. Last week LSS's new chef complained to Linda, the owner of LSS, about a shipment of USDA Choice beef when he had ordered Prime. He refused to cook with "that lousy inferior meat." Linda called her contact at USA Foods and said they needed to take away the meat they delivered as it did not comply with the contract since LSS had ordered "USDA Prime.' USA Foods responded that their contract allowed them to substitute "USDA Choice" as long as they charged accordingly. Linda responded, "Where does it say that in the contract?" Did USA Foods breach the contract by delivering the "USDA Choice" meat? (A) Yes, a contract only contains the express provisions included in the agreement and since the written contract does not provide for substitutions, USA Foods breached the obligation to deliver the meat ordered. (B) Yes, the facts do not establish a course of dealing that allows substitutions of the type made by USA Foods. (C) No, the usage of trade established between USA Foods and LSS supplements the agreement to include the right to make this type of substitution. (D) No, the extensive opportunities for performance are sufficient to establish a course of performance that supplements the agreement to include the right to make this type of substitution.

(D) No, the extensive opportunities for performance are sufficient to establish a course of performance that supplements the agreement to include the right to make this type of substitution.

Book Club sends three recently published novels to Camila. All three novels are on the list of "best sellers." The letter accompanying the packages states that Alison may purchase the books for only $20, which is 30% below the retail price. The letter also states, "If you do not want the books, then please return the books within five days and you will not owe us anything. If we do not receive the books within five days, then we will consider the books to have been purchased and we will bill you for $20." Book Club did not include return postage. Camila does not respond to Book Club within five days. Instead, Camila puts the three novels on her bookshelf unread, so that she can return the books if Book Club sends return postage. Has a contract formed between Book Club and Camila? (A) Yes, because it was reasonable for Book Club to expect that Camila would understand that silence is acceptance (B) Yes, because Camila has exercised dominion over the books by putting the books on her shelf (C) No, because a discount of only 30% is not enough to characterize the $20 as nominal consideration (D) No, unless Book Club can show that there are prior dealings with Camila that justify Book Club in thinking that her silence would be acceptance

(D) No, unless Book Club can show that there are prior dealings with Camila that justify Book Club in thinking that her silence would be acceptance

Landscaper sent a letter to Nursery on August 1 stating, "I need to purchase 100 evergreen trees. Are you able to deliver this many trees and how much would it cost?" Landscaper included details about the specific type of evergreen tree and the size required. Landscaper also signed the letter. Nursery replied to Landscaper with a signed letter dated August 5 that stated, "Mr. Landscaper, we can provide you with 100 evergreen trees according to your specifications for the price of $500, which is $5 per tree. This price is good for six months." Landscaper received the letter on August 10. Which of the following is the best description of the legal effect of Nursery's letter? (A) Nursery's letter is an offer, but only if Landscaper accepts it within six months. (B) Nursery did not make an offer because the term concerning the six-month period is over the three-month limit under the UCC's Merchant's Firm Offer provision. (C) Nursery only gave a price quotation, which is not an offer (D) Nursery made an offer on August 10.

(D) Nursery made an offer on August 10.

Seller builds and sells high-end custom computers. Buyer, who earns her living as a teacher, sent Seller a signed email with an offer that Seller build a computer for her. The offer contained (1) specifications for the custom computer, (2) a delivery date of July 15, and (3) a proposed price of $10,000 to be paid upon delivery. Seller sent a signed email stating, "I accept your offer to build a custom computer with these specifications delivered by July 15 in return for a payment of $10,000, payment to be made upon delivery. All computers are sold 'as is' without any warranty—express or implied." Buyer did not reply to Seller's email. Seller builds the custom computer according to the specifications and delivered it to Buyer by July 15. Buyer paid the $10,000 upon delivery. Buyer used the computer for one week; however, the computer, through no fault of Buyer, stopped working after one week. Buyer tried to return the computer or have Seller fix it, but Seller refused. Under UCC § 2-314, all sales of goods by a merchant include an "implied warranty of merchantability," which under these facts means that the goods must be fit for its ordinary purpose. However, the implied warranty of merchantability is not included if the writing states that the goods are sold "as is." Buyer brought a suit based on breach of the implied warranty merchantability against Seller. Buyer argued that a $10,000 computer that stops working after one week is clearly not fit for its ordinary purpose. Seller contends that the "as is" clause releases Seller from liability for defects. At trial, how will the court rule regarding whether the "as is" clause was an included term in the contract? (A) The clause was included, because under the mirror image rule, Seller's email was a counteroffer, which Buyer accepted under the last shot doctrine when Buyer paid for the computer. (B) The clause was included, because under the principle of caveat emptor (buyer beware), the buyer assumes the risk of all imperfections in the sale of goods. (C) The clause was not included, because the "as is" clause materially alters the terms of Buyer's offer. (D) The clause was not included, because the "as is" clause would be construed as a proposal for addition to the contract and Buyer did not expressly agree to the proposal.

(D) The clause was not included, because the "as is" clause would be construed as a proposal for addition to the contract and Buyer did not expressly agree to the proposal.

A high-end furniture maker uses a particular type of wood called "curly maple" to make its furniture. To make sure that it has a sufficient supply of curly maple wood, the furniture maker enters into a contract with a lumber company. The contract provides that the furniture maker will purchase and the lumber company will sell all of the curly maple that the lumber company produces for five years at a specific price. For the first two years, the lumber company produces 100,000 board feet of curly maple a year, which the furniture company purchases. For the third year, the lumber company thinks that it can produce up to 200,000 board feet of curly maple. Which the following best describes the rights and duties of the parties? (A) The lumber company is not required to sell any of its curly maple wood to the furniture maker if there are large variations in the quantity that it produces. (B) The lumber company must sell at least 100,000 board feet of curly maple wood to the furniture maker and may sell anything in excess to another buyer. (C) The lumber company must sell its curly maple wood exclusively to the furniture maker and the furniture maker must purchase curly maple exclusively from lumber company. (D) The furniture maker is not obligated to purchase a quantity that is unreasonably disproportionate from the previous output of 100,000 board feet.

(D) The furniture maker is not obligated to purchase a quantity that is unreasonably disproportionate from the previous output of 100,000 board feet.

Seller manufactures and sells hydraulic jacks. Buyer is a construction company that regularly purchases hydraulic jacks, which it uses to install elevators. On August 1, by signed writing, Buyer contacts Seller: "Pursuant to earlier discussions with you, we have studied your Hydraulic Jack Set Model U-5. We wish to purchase ten units of this particular model for $500,000 with delivery on September 1. We will pay within 30 days after you deliver." On August 2, Seller responds with a signed "Acceptance of offer, and Sales Confirmation" form. Seller's form included all of the terms on Buyer's writing. Seller's form also contained the following clause: "Late Charge: If by 90 days after Seller makes delivery, there remains unpaid any portion of the purchase price, Buyer agrees to pay, as a late charge, Interest on the unpaid balance for each month during which it remains unpaid.' On another part of the form, "Interest" is defined to be the prevailing market rate, and a method is determined to calculate the amount. In this industry, interest as a late charge is a standard practice; however, Buyer's writing did not include this clause. Seller sends the form to Buyer, and Buyer quickly receives it. Buyer makes no response, and waits for Seller to deliver the Hydraulic Jack Sets. On September 1, as agreed, Seller delivers them. Buyer does not pay the amount due until 120 days later. Seller attempts to charge interest but Buyer refuses since the term was not part of the original offer. How will a court likely rule on whether the Late Charge is included as a term in the contract? (A) The term is not included, because the Late Charge would be construed as a proposal for addition to the contract and Buyer did not expressly agree to the proposal. (B) The term is not included, because the addition of a Late Charge materially alters the terms of the contract. (C) The term is not included, because Buyer objected to the additional term. (D) The term is included, because the Late Charge provision does not materially alter the terms.

(D) The term is included, because the Late Charge provision does not materially alter the terms.

A major league baseball team ran advertisements in the local media in order to increase ticket sales. The promotion stated, "Anyone who attends Saturday's baseball game wearing our team's jersey gets one free hot dog." Is the team's advertisement for a free hot dog an offer? (A) No, because advertisements are generally not considered offers (B) No, because the advertisement does not identify an offeree (C) Yes, because the advertisement invites acceptance by a promise (D) Yes, because the advertisement invites acceptance by performance

(D) Yes, because the advertisement invites acceptance by performance

A general contractor was planning to bid on a government project to build a bridge. The general contractor solicited bids from subcontractors for a variety of jobs including dredging work. The general contractor informed all of the subcontractors that their bids would be used for the general contractor's bid for the government bridge project. Among the bids for the dredging work, the lowest was $100,000, and the general contractor used this bid in making his overall bid to the government. The general contractor was awarded the government contract. Before the general contractor could contact anyone, the subcontractor who made the $100,000 bid called the general contractor to say that it was revoking its offer because it had made a mistake. The subcontractor was willing to do the work for $120,000. The general contractor refused and then found another subcontractor to do the dredging work for $110,000. If the general contractor sues the subcontractor who initially bid $100,000 and wins a breach of contract lawsuit, it is probably because the court held: (A) that the parties formed an express option contract to keep the subcontractor's $100,000 offer open for a reasonable time and the general contractor accepted within that time frame. (B) that the subcontractor made an express offer for a unilateral contract where the beginning of performance was the general contractor's submission of his bid to the government. (C) that an express conditional contract had formed where if the general contractor won the government bid, then the contract for dredging work would form. (D) that the general contractor relied to its detriment on the subcontractors' bid.

(D) that the general contractor relied to its detriment on the subcontractors' bid.

A real estate developer wished to purchase coin-operated washing machines and dryers for laundry rooms in its residential properties. After some negotiation with a manufacturer of washing machines, the manufacturer provided the developer with a signed and written offer letter that stated that the manufacturer would sell and install up to 500 washing machines and 500 dryers of a certain make and model at a price of $300 each. The offer letter was dated July 1 and stated that the offer would be held open until September 30. Before making the sale, the developer wanted to shop around, although it was not able to find a better deal. On September 1, the manufacturer told the developer that it would now have to charge $350 for each machine since the developer took two months to decide. The developer immediately sent an acceptance of the manufacturer's July 1 offer placing an order for 500 washing machines and 500 dryer at $300 each. The manufacturer refused to honor the July 1 offer. If the developer sues the manufacturer for breach of contract and the developer wins it will probably be because: (A) the building company had no reasonable alternative but to purchase the machines from the manufacturer. (B) the increased price was unconscionable. (C) the court invoked the common law doctrine of promissory estoppel. (D) the manufacturer's offer was deemed irrevocable until September 30.

(D) the manufacturer's offer was deemed irrevocable until September 30.