Multistate Bar Exam Contracts 2 — Questions and Answers
Question 1: A merchant sends a signed written offer to sell 500 widgets at $10 each, stating the offer is 'firm for 30 days.' Under the UCC, this offer:
- May be revoked at any time before acceptance
- Is irrevocable for 30 days even without consideration (Correct answer)
- Is irrevocable only if the offeree gave consideration
- Expires after 3 months regardless of its stated term
Correct answer: Is irrevocable for 30 days even without consideration
Under UCC § 2-205, a merchant's signed, written firm offer is irrevocable for the stated period (up to 3 months) without any consideration from the offeree.
Question 2: A seller contracts to deliver 100 chairs by May 1. On April 15, the seller tells the buyer, 'I won't be delivering those chairs.' The buyer's best immediate legal remedy is:
- Wait until May 1 and then sue for breach
- Immediately treat the contract as breached and seek damages (Correct answer)
- Only seek specific performance since the goods are unique
- Accept the repudiation and negotiate a new contract
Correct answer: Immediately treat the contract as breached and seek damages
An anticipatory repudiation allows the non-breaching party to immediately treat the contract as breached and sue for damages without waiting for the performance date.
Question 3: A contract for the sale of land contains a clause: 'Time is of the essence.' Buyer tenders payment one day late. Seller refuses to convey. The likely result is:
- Seller must perform because one day is immaterial
- Seller may rescind because buyer materially breached (Correct answer)
- Buyer is entitled to reasonable delay without consequence
- Seller must give written notice before refusing to perform
Correct answer: Seller may rescind because buyer materially breached
A 'time is of the essence' clause makes timely performance a material condition, so even a one-day delay constitutes a material breach entitling the seller to rescind.
Question 4: An employer promises a long-time employee a pension upon retirement. The employee retires in reliance on that promise. The employer then refuses to pay. The best theory for enforcing the promise is:
- Bilateral contract based on past service
- Quasi-contract for unjust enrichment
- Promissory estoppel based on detrimental reliance (Correct answer)
- Unilateral contract accepted by continued employment
Correct answer: Promissory estoppel based on detrimental reliance
Promissory estoppel applies when a party detrimentally relies on a promise and injustice can only be avoided by enforcement, even without bargained-for consideration.
Question 5: Under the Statute of Frauds, which contract does NOT require a writing?
- A 2-year employment contract
- A contract to sell land for $100
- A promise to pay another's debt as surety
- A contract for services performable within one year (Correct answer)
Correct answer: A contract for services performable within one year
Contracts fully performable within one year of formation do not fall within the Statute of Frauds one-year provision and therefore do not require a written memorandum.
Question 6: Buyer and Seller agree on a contract for 200 units, but the written contract mistakenly states 100 units due to a mutual scrivener's error. The appropriate remedy is:
- Rescission of the entire contract
- Reformation to reflect the true agreement of 200 units (Correct answer)
- Enforcement of the written term for 100 units only
- Specific performance for 200 units as the oral agreement stated
Correct answer: Reformation to reflect the true agreement of 200 units
Reformation is the proper equitable remedy when a written contract does not reflect the parties' actual agreement due to mutual mistake in drafting.
Question 7: A contractor substantially performs a home renovation but omits a small requested feature. Under the doctrine of substantial performance, the owner:
- Owes nothing because the contractor breached the contract
- Owes the full contract price without any offset
- Owes the contract price minus the cost to remedy the deficiency (Correct answer)
- May rescind the contract and recover all payments made
Correct answer: Owes the contract price minus the cost to remedy the deficiency
Under substantial performance, the owner must pay the contract price less the cost to complete or correct the omitted work — the contractor does not forfeit payment entirely.
Multistate Bar Exam Contracts 2
A merchant sends a signed written offer to sell 500 widgets at $10 each, stating the offer is 'firm for 30 days.' Under the UCC, this offer: