GLEIM Chapter 13
Cookie Co. offered to sell Distrib Markets 20,000 pounds of cookies at $1.00 per pound, subject to certain specified terms for delivery. Distrib replied in writing as follows: "We accept your offer for 20,000 pounds of cookies at $1.00 per pound, weighing scale to have valid city certificate." Under the UCC, A. A contract was formed between the parties B. A contract will be formed only if Cookie agrees to the weighing scale requirement C. No contract was formed because Distrib included the weighing scale requirement in its reply D. No contract was formed because Distrib's reply was a counteroffer
A. A contract was formed between the parties (Additional or different terms in an unconditional, definite, and seasonable acceptance of an offer for a sale of goods are construed as proposals for addition to the contract. But, between merchants, such terms become part of the contract unless (1) the offer expressly limits acceptance to its terms, (2) the additional or different terms materially alter the offer, or (3) the offeree objects within a reasonable time (UCC 2-207). Thus, the weighing scale term becomes part of the agreement unless objected to in a reasonable time.)
The distinction between contracts that are covered by the UCC and those that are not is A. Basically dependent upon whether the subject matter of the contract involves the purchase or sale of goods B. Based upon the dollar amount of the contract C. Dependent upon whether the statute of frauds is involved D. Of relatively little or no importance because the laws are invariably the same
A. Basically dependent upon whether the subject matter of the contract involves the purchase or sale of goods (The UCC covers contracts for the purchase or sale of goods (UCC 2-102), and Article 2 of the UCC governs most of these transactions. If a contract is not for the sale or purchase of goods, it is rarely covered by the UCC)
On Monday, Gullible George is induced to sell a computer to Fraudulent Freddy on the basis of Freddy's misrepresentation that he is Wealthy Walter. That same day, Freddy resells the computer to Innocent Ivan, a good faith purchaser for value. On Tuesday, Gullible George sells an electronic typewriter to Dishonest David who pays for the goods with a check that is later dishonored by the payor (drawee) bank. Before the check is dishonored, David sells the typewriter to Innocent Irene, a good faith purchaser for value. On the basis of these facts, A. George's best remedy is to recover the value of the goods from Freddy and David in a tort action for deceit B. George is entitled to recover the computer from Ivan, but he is not entitled to recover the typewriter from Irene C. George is entitled to recover the typewriter from Irene, but he is not entitled to recover the computer from Ivan D. George is entitled to recover the computer from Ivan and the typewriter from Irene
A. George's best remedy is to recover the value of the goods from Freddy and David in a tort action for deceit (In general, a purchaser of goods acquires only the title that his or her transferor had or had power to transfer. Under UCC 2-403, a purchaser who deceived the transferor as to his or her identity or procured delivery of the goods in exchange for a check that is later dishonored has a voidable rather than a void title. The transferor can recover the goods (or damages) from the wrongdoer. However, a person with voidable title may transfer good title to a good faith purchaser for value. Thus, George cannot recover from Ivan or Irene, each of whom has good title.)
Which of the following factors is most important in deciding who bears the risk of loss between merchants when goods are destroyed during shipment? A. The agreement of the parties B. Whether the goods are perishable C. Who has title at the time of the loss D. The terms of applicable insurance policies
A. The agreement of the parties (The parties to a contract for the sale of goods ordinarily may determine who will have the risk of loss, or they can divide the risk of loss. The agreement as to risk may be express or implied from trade usage, course of dealing, or course of performance. In the absence of contrary agreement, the intent with respect to risk is often determined by shipping and delivery terms. Whether the parties are merchants usually does not affect risk of loss.)
Which of the following statements is true with regard to an auction of goods? A. The auctioneer may withdraw the goods at any time prior to completion of the sale unless the goods are put up without reserve B. A bidder may retract a bid before the completion of the sale only if the auction is without reserve C. A bidder's retraction of a bid will revive the prior bid if the sale is with reserve D. In a sale with reserve, a bid made while the hammer is falling automatically reopens the bidding
A. The auctioneer may withdraw the goods at any time prior to completion of the sale unless the goods are put up without reserve (An auction is with reserve unless the goods are explicitly offered without reserve. When goods are auctioned with reserve, the auctioneer may withdraw them at any time before (s)he announces completion of the sale. In an auction without reserve, the goods may not be withdrawn after the auctioneer calls for bids unless no bid is made (UCC 2-328).
A sheep rancher agreed, in writing, to sell all the wool shorn during the shearing season to a weaver. The contract failed to establish the price and a minimum quantity of wool. After the shearing season, the rancher refused to deliver the wool. The weaver sued the rancher for breach of contract. Under Article 2 of the UCC, will the weaver win? A. Yes, because this was an output contract B. Yes, because both price and quantity terms were omitted C. No, because quantity cannot be omitted for a contract to be enforceable D. No, because the omission of price and quantity terms prevents the formation of a contract
A. Yes, because this was an output contract (An agreement by a buyer to purchase the entire output of a seller's product for a specified period, or an agreement by a seller to supply a buyer with all of the buyer's requirements of specified goods, is enforceable under both the UCC and the Restatement of Contracts (Second). The courts apply an objective standard based upon good faith by both parties. Thus, a buyer cannot expand his or her operations extraordinarily and demand that the seller supply all of his or her requirements, and the seller's output cannot be unreasonably disproportionate to the normal previous output. Accordingly, the contract does not fail for lack of a quantity term. Furthermore, it does not fail for lack of a price term. The UCC permits a contract for the sale of goods to be made "in any manner sufficient to show agreement." Nearly every term of a sales contract may be implied, including price. Under the UCC, the price is a reasonable price at the time of delivery if nothing is said as to price. Thus, the weaver will prevail in a suit under UCC Article 2.)
Under UCC Article 2, and unless otherwise agreed to, the seller's obligation to the buyer is to A. Deliver the goods to the buyer's place of business B. Hold conforming goods and give the buyer whatever notification is reasonably necessary to enable the buyer to take delivery C. Deliver all goods called for in the contract to a common carrier D. Set aside conforming goods for inspection by the buyer before delivery.
B. Hold conforming goods and give the buyer whatever notification is reasonably necessary to enable the buyer to take delivery (Absent an agreement otherwise, the seller is not obligated to deliver the conforming goods to the buyer but merely needs to hold them for the buyer's disposition.)
Which of the following is excluded from the UCC's definition of goods? A. Minerals (including oil and gas) to be extracted by the seller B. Investment securities C. Growing crops and timber D. The unborn young of animals.
B. Investment securities (UCC 2-105 defines goods as all things (including specially manufactured goods) that are movable at the time of identification to the contract for sale other than the money in which the price is to be paid, investment securities (Article 8), and things in action)
Taylor signed and mailed a letter to Peel that stated: "Ship promptly 600 dozen grade A eggs." Taylor's offer A. May be accepted only by a prompt shipment B. May be accepted by either a prompt promise to ship or prompt shipment C. Is invalid because the price term was omitted D. Is invalid because the shipping term was omitted
B. May be accepted by either a prompt promise to ship or prompt shipment (Unless otherwise unambiguously indicated by the language or circumstances, an order to buy goods for prompt or current shipment invites acceptance either by a prompt promise to ship or by prompt shipment (UCC 2-206). Notice need not be given when prompt shipment is made. However, if acceptance is by preparation of the goods for later shipment, notice should be given to avoid lapse of the offer. But if the offer clearly requires shipment as the method of acceptance, a promise to ship is not a valid acceptance.)
Grill deals in the repair and sale of new and used clocks. West brought a clock to Grill to be repaired. One of Grill's clerks mistakenly sold West's clock to Hone, another customer. Under the Sales Article of the UCC, will West win a suit against Hone for the return of the clock? A. No, because the clerk was not aware that the clock belonged to West B. No, because Grill is a merchant to whom goods had been entrusted C. Yes, because Grill could not convey good title to the clock. D. Yes, because the clerk was negligent in selling the clock
B. No, because Grill is a merchant to whom goods had been entrusted (Any entrusting of goods to a merchant who deals in goods of that kind gives the merchant power to transfer all rights of the entruster to a buyer in the ordinary course of business.)
If a contract for the sale of goods includes a C&F shipping term and the seller has fulfilled all of its obligations, the A. Title to the goods will pass to the buyer when the goods are received by the buyer at the place of destination B. Risk of loss will pass to the buyer upon delivery of the goods to the carrier C. Buyer retains the right to inspect the goods prior to making payment D. Seller must obtain an insurance policy at its own expense for the buyer's benefit
B. Risk of loss will pass to the buyer upon delivery of the goods to the carrier (The term CIF means that the price includes the cost of the goods, insurance, and freight to the indicated destination (UCC 2-320). Unless otherwise agreed by the parties, the use of the term CIF also requires the seller to load the goods, pay the freight, obtain the insurance, etc. It also determines that risk of loss passes to the buyer upon shipment unless the parties have agreed otherwise. The term C&F has the same effect except with regard to insurance.)
Regarding the scope of Article 2 of the UCC, when a contract involves a mixed transaction, such as a sale of goods combined with the rendition of services, which of the following statements is true? A. The courts ordinarily will apply Article 2 to any contract that involves goods B. The courts ordinarily apply Article 2 when the contract's focus or predominant feature is the sale of goods C. The courts ordinarily will not apply Article 2 to any contract that involves the rendition of services D. Applicability of Article 2 depends on the dollar amount of the contract.
B. The courts ordinarily apply Article 2 when the contract's focus or predominant feature is the sale of goods (Article 2 of the UCC applies to transactions in (sales of) goods (UCC 2-101). Sales of services are not covered. When the contract involves a mixed transaction, the courts ordinarily apply Article 2 if the predominant feature of the contract as a whole is the sale of goods, with services incidentally involved. The issue arises, for example, when a hospital gives a blood transfusion or a beautician dyes the hair of a customer.)
Filmore purchased a Miracle color television set from Allison Appliances, an authorized dealer, for $499. The written contract contained the usual 1-year warranty as to parts and labor as long as the set was returned to the manufacturer or one of its authorized dealers. The contract also contained an effective disclaimer of any express warranty protection, other than that included in the contract. It further provided that the contract represented the entire agreement and understanding of the parties. Filmore claims that, during the bargaining process, Surry, Allison's agent, orally promised to service the set at Filmore's residence if anything went wrong within the year. Allison has offered to repair the set if it is brought to the service department but denies any liability under the alleged oral express agreement. Which of the following would be the best defense for Allison to rely upon in the event that Filmore sues? A. The statute of frauds B. The parol evidence rule C. That all warranty protection was disclaimed other than the express warranty contained in the contract D. That Surry, Allison's agent, did not have express authority to make such a promise
B. The parol evidence rule (The writing stated that it was the entire agreement of the parties (an integration). "A writing intended by the parties as the final expression of their agreement with respect to such terms as are included therein may not be contradicted by evidence of any prior agreement or of a contemporaneous oral agreement" (UCC Article 2). This rule does not exclude course of dealing or performance, usage of trade, or subsequent modifications by the parties. Here, the contemporaneous oral agreement contradicted the term providing for servicing of the set upon return to the manufacturer or authorized dealer. Hence, the parol evidence rule is the seller's best defense.)
Under the Sales Article of the UCC, which of the following requirements must be met for a writing to be an enforceable contract for the sale of goods? A. The writing must contain a term specifying the price of the goods B. The writing must contain a term specifying the quantity of the goods C. The writing must contain the signatures of all parties to the writing D. The writing must contain the signature of the party seeking to enforce the writing
B. The writing must contain a term specifying the quantity of the goods (Under the Sales Article of the UCC, leaving open one or more terms does not prevent formation of a contract. However, if the quantity term is left open, the general rule is that a court may have no basis to grant a remedy. Thus, a contract may not have been formed.)
I. M. Cruck sold refrigerators door to door. Cruck called on Ms. Kalik, a welfare recipient with four small children. Convinced by the sales talk, Kalik signed a form contract that clearly stated the terms of the agreement. After adding credit charges, insurance, and tax, the total price came to more than $1,200. The retail value of the appliance was $300. After paying $600, Ms. Kalik defaulted. Ms. Kalik then sued and prevailed on the theory of A. Duress B. Unconscionability C. Fraud D. Misrepresentation.
B. Unconscionability (UCC 2-302 provides that a court may refuse to enforce an unconscionable contract, it may enforce the remainder without the offending clause, or it may limit the application of any such clause so as to avoid any unconscionable result. The term unconscionable is not defined, but the purpose of the section is to prevent oppression and unfair surprise and to avoid results shocking to the conscience. In a case with similar facts, the court reformed the agreement to set the price term equal to the amount already paid.)
When do title and risk of loss for conforming goods pass to the buyer under a shipment contract covered by the Sales Article of the UCC? A. When the goods are identified and designated for shipment. B. When the goods are given to a common carrier C. When the goods arrive at their destination D. When the goods are tendered to the buyer at their destination
B. When the goods are given to a common carrier (In a shipment contract, the seller agrees to deliver the goods to a carrier at the place of shipment. The risk of loss passes to the buyer when the seller delivers the goods to the carrier.)
Casassa, a merchant in San Francisco, under the terms of a nonshipment contract, agrees to sell 50 cases of packaged macaroni to Paoli, a restaurant owner whose business is in San Jose. At the time of contracting for the sale, both parties are aware that these identified goods are in a warehouse in Fresno. The place for delivery is not specified in the agreement. On the basis of these facts, the place for delivery is A. San Francisco B. San Jose C. Fresno D. Indefinite, and the contract is unenforceable.
C. Fresno (A contract for the sale of goods may not expressly designate a place of delivery, and none may be provided by course of dealing, usage of trade, or course of performance. In this case, UCC 2-308 provides that the seller's place of business (if none, his or her residence) will be the place of delivery. However, if the goods are known to be located elsewhere (Fresno), the other location is the place of delivery.)
To satisfy the UCC statute of frauds, a written agreement for the sale of goods must A. Contain payment terms B. Be signed by both buyer and seller C. Indicate that a contract for sale has been made D. Refer to the time and place of delivery
C. Indicate that a contract for sale has been made (A writing must be sufficient to indicate that a contract for sale has been made between the parties and signed by the party sought to be bound or his or her authorized agent or broker. A writing is not insufficient because it omits or misstates a term agreed upon, but it will not be enforceable beyond the quantity of goods shown.)
EG Door Co., a manufacturer of custom exterior doors, verbally contracted with Art Contractors to design and build a $2,000 custom door for a house that Art was restoring. After EG had completed substantial work on the door, Art advised EG that the house had been destroyed by fire and Art was canceling the contract. EG finished the door and shipped it to Art. Art refused to accept delivery. Art contends that the contract cannot be enforced because it violated the statute of frauds by not being in writing. Under the Sales Article of the UCC, is Art's contention true? A. Yes, because the contract was not in writing B. Yes, because the contract cannot be fully performed due to the fire C. No, because the goods were specially manufactured for Art and cannot be resold in EG's regular course of business D. No, because the cancelation of the contract was not made in writing
C. No, because the goods were specially manufactured for Art and cannot be resold in EG's regular course of business (Under the statute of frauds, most contracts for the sale of goods for a price of $500 or more are unenforceable unless they are in writing. The writing must (1) indicate that a contract has been made, (2) specify the quantity of goods, and (3) be signed by the party against whom enforcement is brought. However, the contract is enforceable without a writing because (1) the goods were to be specially made for the buyer, (2) they were not suitable for sale to others in the ordinary course of the seller's business, and (3) the seller made a substantial beginning of their manufacture or commitments for their procurement before a notice of repudiation was received from the buyer.)
Pulse Corp. maintained a warehouse where it stored its manufactured goods. Pulse received an order from Star. Shortly after Pulse identified the goods to be shipped to Star, but before moving them to the loading dock, a fire destroyed the warehouse and its contents. With respect to the goods, which of the following statements is true? A. Pulse has title but no insurable interest B. Star has title and an insurable interest C. Pulse has title and an insurable interest D. Star has title but no insurable interest
C. Pulse has title and an insurable interest (Unless otherwise explicitly agreed to, title passes to the buyer at the time and place at which the seller completes performance of physical delivery of the goods. The seller has an insurable interest in goods as long as title to, or any security interest in, the goods remains with the seller. A buyer of goods has an insurable interest in them when they are identified to the contract.)
Which of the following statements applies to a sale on approval under UCC Article 2? A. Both the buyer and seller must be merchants B. The buyer must be purchasing the goods for resale C. Risk of loss for the goods passes to the buyer when the goods are accepted after the trial period D. Title to the goods passes to the buyer on delivery of the goods to the buyer
C. Risk of loss for the goods passes to the buyer when the goods are accepted after the trial period (A sale is on approval if the goods are delivered to the buyer with an understanding that (s)he may test them for the purpose of determining whether (s)he wishes to purchase them. (S)he may return them without breaching the contract even though they conform to the contract. In a sale on approval, title and risk of loss do not pass to the buyer until acceptance (UCC 2-327). Acceptance may be express or implied, e.g., by not returning the goods in a reasonable period.)
Under UCC Article 2, when a contract for the sale of goods stipulates that the seller ship the goods by common carrier, "FOB purchaser's loading dock," which of the parties bears the risk of loss during shipment? A. The purchaser, because risk of loss passes when the goods are delivered to the carrier B. The purchaser, because title to the goods passes at the time of shipment C. The seller, because risk of loss passes only when the goods reach the purchaser's loading dock D. The seller, because risk of loss remains with the seller until the goods are accepted by the purchaser
C. The seller, because risk of loss passes only when the goods reach the purchaser's loading dock (The parties to a contract for the sale of goods may agree who will have the risk of loss. In the absence of an express agreement, the intent with respect to risk is determined by shipping and delivery terms. The shipping term FOB purchaser's place of business indicates a destination contract, and the seller bears the risk of loss until the goods reach the buyer's loading dock.)
On day 1, Jackson, a merchant, mailed Sandy a signed letter that contained an offer to sell Sandy 500 electric fans at $10 per fan. The letter was received by Sandy on day 3. The letter contained a promise not to revoke the offer but no expiration date. On day 4, Jackson mailed Sandy a revocation of the offer to sell the fans. Sandy received the revocation on day 6. On day 7, Sandy mailed Jackson an acceptance of the offer. Jackson received the acceptance on day 9. Under the Sales Article of the UCC, was a contract formed? A. No contract was formed because the offer failed to state an expiration date B. No contract was formed because Sandy received the revocation of the offer before Sandy accepted the offer C. A contract was formed on the day Jackson received Sandy's acceptance D. A contract was formed on the day Sandy mailed the acceptance to Jackson
D. A contract was formed on the day Sandy mailed the acceptance to Jackson (A firm offer is an offer by a merchant to buy or sell goods in a signed record that, by its terms, gives assurance that it will be held open and is not revocable, for lack of consideration, during the time stated or, if no time is stated, for a reasonable time. The firm offer did not include an expiration date. Thus, it gives assurance that it is not revocable for a reasonable amount of time. Accordingly, Jackson's revocation is probably ineffective. Moreover, because the mailbox rule applies, the acceptance was effective when it was mailed.)
On Monday, Wolfe paid Aston Co., a furniture retailer, $500 for a table. On Thursday, Aston notified Wolfe that the table was ready to be picked up. On Saturday, while Aston was still in possession of the table, it was destroyed in a fire. Who bears the loss of the table? A. Wolfe, because Wolfe had title to the table at the time of loss B. Aston, unless Wolfe is a merchant C. Wolfe, unless Aston breached the contract D. Aston, because Wolfe had not yet taken possession of the table.
D. Aston, because Wolfe had not yet taken possession of the table (If (1) the parties have no agreement as to risk of loss, (2) no carrier is involved, and (3) the goods are not in the possession of a bailee, the risk of loss passes to the buyer on his or her receipt of the goods if the seller is a merchant. Otherwise, the risk passes to the buyer on tender of delivery (UCC 2-509). Because Aston is a merchant (a person engaged in selling goods of the kind), risk did not pass to Wolfe on tender of delivery.)
Cey Corp. entered into a contract to sell parts to Deck, Ltd. The contract provided that the goods would be shipped "FOB Cey's warehouse." Cey shipped parts different from those specified in the contract. Deck rejected the parts. A few hours after Deck informed Cey that the parts were rejected, they were destroyed by fire in Deck's warehouse. Cey believed that the parts were conforming to the contract. Which of the following statements is true? A. Regardless of whether the parts were conforming, Deck will bear the loss because the contract was a shipment contract B. If the parts were nonconforming, Deck had the right to reject them, but the risk of loss remains with Deck until Cey takes possession of the parts C. If the parts were conforming, risk of loss does not pass to Deck until a reasonable period of time after they are delivered to Deck D. If the parts were nonconforming, Cey will bear the risk of loss, even though the contract was a shipment contract
D. If the parts were nonconforming, Cey will bear the risk of loss, even though the contract was a shipment contract (If the contract does not cover risk, the most significant factor in determining who has the risk of loss is whether a breach has occurred. If a tender or delivery of goods is so nonconforming as to give a right of rejection, the risk of loss remains on the seller until cure or acceptance (UCC 2-510). The breaching party therefore has the risk of loss. Even if seller's shipment of nonconforming goods is an accommodation, it is a breach. The result is the same for either a shipment contract or a destination contract.)
Mayker, Inc., and Oylco contracted for Oylco to be the exclusive provider of Mayker's fuel oil for 3 months. The stated price was subject to increases of up to a total of 10% if the market price increased. The market price rose 25% and Mayker tripled its normal order. Oylco seeks to avoid performance. Oylco's best argument in support of its position is that A. There was no meeting of the minds B. The contract was unconscionable C. The quantity was not definite and certain enough D. Mayker ordered amounts of oil unreasonably greater than its normal requirements
D. Mayker ordered amounts of oil unreasonably greater than its normal requirements (Requirements and output contracts are enforceable under UCC 2-306 provided that the parties act in good faith and demand or tender reasonable quantities. Absent stated estimates, normal or otherwise comparable prior requirements or output will provide the standard of reasonableness. No estimates were made, so if Mayker orders excessive amounts, it will have violated its duties, and Oylco may be able to avoid performance.)
An oral agreement concerning the sale of goods entered into without consideration is binding if the agreement A. Is a firm offer made by a merchant who promises to hold the offer open for 30 days B. Is a waiver of the non-breaching party's rights arising out of a breach of the contract C. Contradicts the terms of a subsequent written contract that is intended as the complete and exclusive agreement of the parties D. Modifies the price in an existing, enforceable contract from $525 to $475
D. Modifies the price in an existing, enforceable contract from $525 to $475 (An oral modification of a contract for the sale of goods does not require consideration to be binding, but the UCC's statute of frauds section must be satisfied if the contract "as modified" is within its provisions. Because the contract as modified is for less than $500, no writing is required, and the oral agreement is enforceable.)
On May 2, Lace Corp., an appliance wholesaler, offered to sell appliances worth $3,000 to Parco, Inc., a household appliances retailer. The offer was signed by Lace's president and provided that it would not be withdrawn before June 1. It also included the shipping terms: "FOB -- Parco's warehouse." Parco accepted Lace's offer. If Lace inadvertently ships the wrong appliances to Parco and Parco rejects them 2 days after receipt, title to the goods will A. Pass to Parco when they are identified to the contract B. Pass to Parco when they are shipped C. Remain with Parco until the goods are returned to Lace D. Revert to Lace when they are rejected by Parco
D. Revert to Lace when they are rejected by Parco (Title revests in the seller after (1) a rejection or other refusal by the buyer to receive or retain the goods, whether or not justified, or (2) a justified revocation of acceptance. Such revesting occurs by operation of law.)
Doral, Inc., wished to obtain an adequate supply of lumber for its factory extension to be constructed in the spring. It contacted Ace Lumber Company and obtained a 75-day written option (firm offer) to buy its estimated needs for the building. Doral supplied a form contract that included the option. Ace signed at the physical end of the contract but did not sign elsewhere. The price of lumber has risen drastically, and Ace wishes to avoid its obligation. Which of the following is Ace's best defense against Doral's assertion that Ace is legally bound by the option? A. Such an option is invalid if its duration is for more than 2 months B. The option is not supported by any consideration on Doral's part C. Doral is not a merchant D. The promise of irrevocability was contained in a form supplied by Doral and was not separately signed by Ace.
D. The promise of irrevocability was contained in a form supplied by Doral and was not separately signed by Ace. (Under the firm offer rule, if a merchant in a signed writing states that an offer will be held open, the offer may not be revoked during the time stated even if no consideration was given to hold it open. If the offeree supplies the form, however, the firm offer must be separately signed. Ace's best defense is to assert that the firm offer rule does not apply because Ace did not separately sign the promise to hold the offer open. The purpose of this rule is to protect an offeror who is unaware that the offeree's form contains the firm offer term.)
Patch, a frequent shopper at Soon-Shop Stores, received a rain check for an advertised sale item after Soon-Shop's supply of the product ran out. The rain check was in writing and stated that the item would be offered to the customer at the advertised sale price for an unspecified period of time. A Soon-Shop employee signed the rain check. When Patch returned to the store one month later to purchase the item, the store refused to honor the rain check. Under UCC Article 2, will Patch win a suit to enforce the rain check? A. No, because one month is too long a period of time for a rain check to be effective B. No, because the rain check did not state the effective time period necessary to keep the offer open C. Yes, because Soon-Shop is required to have sufficient supplies of the sale item to satisfy all customers D. Yes, because the rain check met the requirements of a merchant's firm offer even though no effective time period was stated.
D. Yes, because the rain check met the requirements of a merchant's firm offer even though no effective time period was stated. (The rain check meets the requirements of the firm offer rule regardless of the lack of a stated time period. A firm offer is an assurance, in writing and signed by a merchant, that the offer will remain open. A firm offer remains open during the time stated, even if it is not supported by consideration. If no time is stated, the time is a reasonable time. But in no event may the period of irrevocability exceed 3 months. Soon-Shop (acting through its agent) is a merchant that signed a writing containing an undertaking to keep an offer open. One month appears to be a reasonable time. Consequently, Patch will win.)
