Contracts Formation & Enforcement Flashcards

Under the UCC's battle of the forms (§ 2-207), if both parties are merchants and the offeree's acceptance includes additional terms, those terms:

Answer: Become part of the contract unless they materially alter the offer or the offeror objects.

Under UCC § 2-207, additional (not different) terms in a merchant's acceptance become part of the contract unless they materially alter the offer, the offer expressly limits acceptance to its terms, or the offeror objects.

Which of the following is an example of an illusory promise?

Answer: 'I will buy all the widgets I want from you this year.'

A promise to buy 'all I want' is illusory because the promisor retains complete discretion to want nothing, making the promise unenforceable for lack of real commitment.

A contractor discovers unexpected bedrock while digging a foundation, tripling costs. The owner refuses to pay more than the contract price. Which defense is most applicable to the contractor?

Answer: Mutual mistake

When both parties were unaware of a material fact (hidden bedrock) at contract formation, the contractor may assert mutual mistake to seek rescission or modification.

Lucy promises to give her friend a car 'someday when I feel like it.' This promise lacks enforceability primarily because of:

Answer: Indefiniteness of the essential terms

A promise conditioned entirely on the promisor's subjective future desire is too indefinite to constitute an enforceable offer because there is no objective standard to measure performance.

Which of the following would satisfy the part-performance exception to the Statute of Frauds for a land contract?

Answer: The buyer pays part of the price, takes possession, and makes improvements.

Part performance for land contracts requires at least two of three elements—payment, possession, and improvements—to take the oral contract out of the Statute of Frauds.

A seller agrees to sell 'my entire output of widgets' to a buyer at a fixed price per unit. This is best described as:

Answer: An output contract enforceable under the UCC

An output contract, where the seller agrees to sell all it produces to the buyer, is enforceable under UCC § 2-306 because the seller's actual output measures the quantity.

Grace hires Mark to paint her house for $3,000. Before Mark begins, Grace tells him the deal is off. Mark does nothing in response. Has Grace committed anticipatory repudiation?

Answer: Yes, and Mark may immediately sue for breach or wait until performance was due.

A clear, unequivocal repudiation before the performance date is anticipatory repudiation, entitling the non-breaching party to sue immediately or wait until the performance date.