Practice Set 1

Question 1

When does the firm offer rule under the UCC make an offer irrevocable without additional consideration?

Answer 1

1. The offeror is a merchant
2. There is an assurance that the offer is to remain open
3. The assurance is contained in a signed writing from the offeror

Question 2

How long is a UCC firm offer between merchants irrevocable for in the absence of a specified time to remain open by the offeror?

Answer 2

Three months unless there is consideration given to keep it irrevocable for longer
This is different from an offer that is open without revocation - it will not lapse because of reasonable time if there is an explicit end date

Question 3

What are the buyer’s options with regards to a shipment of non-conforming goods?

Answer 3

The owner had the right to accept or reject all or part of shipment

Question 4

What are the legal effects of an accord and satisfaction?

Answer 4

Accord Agreement - a party to a contract agrees to accept a performance from the other party that differs from the performance that was promised in the existing contract, in satisfaction of the other party’s existing duty.

Question 5

What is required for an accord to be valid?

Answer 5

There must be consideration or a consideration substitute for the party’s promise to accept the lesser amount, including if the other party honestly disputes the claim or agrees to forego an asserted defense

Question 6

When is a disputed claim satisfied by a negotiable instrument in a valid accord and satisfaction?

Answer 6

The party (1) in good faith (2) tenders a negotiable instrument (3) is accompanied by a conspicuous statement indicating that the instrument was tendered as full satisfaction of the claim and (4) the claimant obtains payment of the instrument

Question 7

When is the defense of impracticability available?

Answer 7

1. An unforeseeable event must occur
2. The nonoccurrence of that event must have been a basic assumption on which the contract was made
3. The party didn’t assume the risk of the event not happening

Question 8

What is a creditor beneficiary?

Answer 8

An intended third party beneficiary of a promise that would (1) satisfy an actual, supposed, or asserted duty of the promisee and (2) the promisee did not intend to make a gift to the third party

Question 9

What are the rights of a creditor beneficiary?

Answer 9

A creditor beneficiary has the right to sue either the promisor or the promisee to enforce the contract

Question 10

When do the rights of an intended beneficiary vest?

Answer 10

1. Materially changes position in justifiable reliance on the rights created;
2. Manifests assent to the contract at one party’s request; or
3. Files a lawsuit to enforce the contract.

Question 11

When is a novation formed after a delegation?

Answer 11

1. The original obligor repudiates liability to the original promisee AND
2. The obligee subsequently accepts performance without reserving rights against the obligor

Question 12

When is a contract covered by the SOF under the UCC enforceable even though the charged party hasn’t signed the writing?

Answer 12

1. Both parties are merchants
2. Recipient has reason to know writing’s contents, AND
3. Recipient does not object in writing within 10 days

Question 13

What are a party’s rights if the other party anticipatorily breaches?

Answer 13

The party can treat the repudiation as a breach and sue immediately

Question 14

When is a party not permitted to sue immediately in the face of an anticipatory breach?

Answer 14

If (1) the date of performance has not passed and (2) the only performance left is payment, then the aggrieved party must wait until performance is due

Question 15

What is the remedy for conversion?

Answer 15

The fair market value of the goods at the time of the conversion of the collection