Application Formation Flashcards
On May 2, Mason orally contracted with Acme Appliances to buy for $480 a washer and dryer for household use. Mason and the Acme salesperson agreed that delivery would be made on July 2. On May 5, Mason telephoned Acme and requested that the delivery date be moved to June 2. The Acme salesperson agreed with this request. On June 2, Acme failed to deliver the washer and dryer to Mason because of an inventory shortage. Acme advised Mason that it would deliver the appliances on July 2 as originally agreed. Mason believes that Acme has breached its agreement with Mason. Acme contends that its agreement to deliver on June 2 was not binding.
Acme’s contention is
A. Correct, because Mason is not a merchant and was buying the appliances for household use.
Modifications agreed to by seller and buyers are permitted and not dependent on whether either party is a merchant. A sale of goods contract does not require new consideration for modification and this contract does not require a writing under the Statue of Frauds because the modified agreement still involves less than $500.
B. Correct, because the agreement to change the delivery date was not in writing.
C. Incorrect, because the agreement to change the delivery date was binding.
D. Incorrect, because Acme’s agreement to change the delivery date is a firm offer that cannot be withdrawn by Acme.
C. Incorrect, because the agreement to change the delivery date was binding.
The modified agreement does not have to be in writing nor consideration paid for the modification to be binding. The underlying sale was for less than $500.
The Statute of Frauds requires a writing only for sales of goods of $500 or more. The modification only changed the delivery date and since the price has not changed, this is still a $480 contract, and the oral modification is valid.
Wrong answer
A. Correct, because Mason is not a merchant and was buying the appliances for household use.
Modifications agreed to by seller and buyers are permitted and not dependent on whether either party is a merchant. A sale of goods contract does not require new consideration for modification and this contract does not require a writing under the Statue of Frauds because the modified agreement still involves less than $500.
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.
To be valid, the contract must specify the subject matter and if there is more than one, there must be a quantity. You cannot form a contract with, “I will sell you some bicycles.” There must be a quantity of bicycles.
Wrong Answer
C. The writing must contain the signatures of all parties to the writing.
One merchant party can sign and still have a valid agreement. Also, the general statute of frauds requires only the signature of the party against whom someone seeks to enforce the agreement.
On May 2, Handy Hardware sent Ram Industries a signed purchase order that stated, in part, as follows:
“Ship for May 8 delivery 300 Model A-X socket sets at current dealer price. Terms 2/10/net 30.”
Ram received Handy’s purchase order on May 4. On May 5, Ram discovered that it had only 200 Model A-X socket sets and 100 Model W-Z socket sets in stock. Ram shipped the Model A-X and Model W-Z sets to Handy without any explanation concerning the shipment. The socket sets were received by Handy on May 8.
Which of the following statements concerning the shipment is correct?
A. Ram’s shipment is an acceptance of Handy’s offer.
B. Ram’s shipment is a counteroffer.
C. Handy’s order must be accepted by Ram in writing before Ram ships the socket sets.
D. Handy’s order can only be accepted by Ram’s shipping of conforming goods.
A. Ram’s shipment is an acceptance of Handy’s offer.
Under the UCC when a buyer orders (unilateral offer to buy) goods to be shipped by a seller, a seller can accept that offer by (1) shipment of conforming goods, (2) by a prompt promise to ship conforming goods, or (3) by the shipment of nonconforming goods without notice of accommodation. Here Ram, in response to Handy’s offer, shipped nonconforming goods without notice (“explanation”) of accommodation resulting in Ram’s acceptance (and breach of contract)
Wrong answer
D. Handy’s order can only be accepted by Ram’s shipping of conforming goods.
Under the UCC when a buyer orders (offers to buy) goods to be shipped by a seller, a seller can accept that offer by (1) shipment of conforming goods, (2) by a prompt promise to ship conforming goods, or (3) by the shipment of nonconforming goods without notice of accommodation. Here Ram, in response to Handy’s offer, shipped nonconforming goods without notice (“explanation”) of accommodation resulting in Ram’s acceptance (and breach of contract).
To satisfy the UCC Statute of Frauds regarding the sale of goods, which of the following must generally be in writing?
A. Designation of the parties as buyer and seller.
B. Delivery terms.
The Statute of Frauds under the UCC requires only the signature of the person to be charged, the quantity of goods ordered, and written evidence of an agreement. The Statute itself does not require anything else to be in writing, including delivery terms, in order for the oral contract to be enforceable.
C. Quantity of the goods.
The Statute of Frauds under the UCC requires only the signature of the person to be charged, the quantity of goods ordered, and written evidence of an agreement. The Statute itself does not require anything else to be in writing in order for the oral contract to be enforceable.
D. Warranties to be made.
C. Quantity of the goods.
The Statute of Frauds under the UCC requires only the signature of the person to be charged, the quantity of goods ordered, and written evidence of an agreement. The Statute itself does not require anything else to be in writing in order for the oral contract to be enforceable.
Wrong answer
B. Delivery terms.
The Statute of Frauds under the UCC requires only the signature of the person to be charged, the quantity of goods ordered, and written evidence of an agreement. The Statute itself does not require anything else to be in writing, including delivery terms, in order for the oral contract to be enforceable.
