US â Contracts â Quiz 1
US contract law â offer, acceptance, consideration, the UCC vs. common law divide, breach, and remedies.
- 1.
A buyer and seller negotiate by email for the purchase of 500 custom-made widgets at $10 each. The seller's email states: 'I confirm our dealâ500 widgets, $10 each, delivery in 30 days.' The buyer replies: 'Agreed, but please also include a warranty card with each unit.' The seller never responds and later refuses to deliver, claiming no contract was formed. Under UCC Article 2, what is the most accurate statement?
- 2.
A general contractor orally agrees to hire a subcontractor to install plumbing in a commercial building for $80,000. The subcontractor spends two weeks mobilizing equipment and turning down other jobs in reliance on the agreement. The contractor then repudiates, claiming the oral contract is unenforceable under the Statute of Frauds. The subcontractor sues. Which is the strongest argument for the subcontractor's recovery?
- 3.
Two parties sign a written agreement for the sale of a house that states 'This agreement is the complete and final expression of the parties' agreement.' At trial, the buyer attempts to introduce evidence of an oral promise made during negotiations that the seller would repaint the exterior before closing. The seller objects. How should the court rule?
- 4.
A homeowner hires a contractor to build an addition for $120,000. After the contractor substantially completes the work, the homeowner refuses to pay the final $30,000 installment, citing minor defects worth $2,000 to repair. The contractor sues for the $30,000. What is the most accurate statement of the parties' rights?
- 5.
A landlord makes an oral promise to a prospective tenant: 'If you move here from Chicago, I'll give you a five-year lease at $1,000/month.' The tenant quits a job, sells belongings, and moves, but the landlord refuses to sign any lease. The tenant sues. No written lease exists. Which theory provides the best basis for recovery?
- 6.
A publisher and an author sign a contract requiring the author to deliver a manuscript by March 1 in exchange for a $50,000 advance. The author delivers on March 1, but the publisher, having found a cheaper alternative, repudiates before paying. The author sues. The publisher argues the advance is a 'penalty' unenforceable under contract law. Which answer is most accurate?
- 7.
A software company sends a purchase order to a hardware vendor for 50 servers at $4,000 each. The vendor's acknowledgment form accepts but adds a clause requiring all disputes to be resolved by arbitration. Neither party's form is signed by the other. Both parties are merchants. Under UCC § 2-207, what happens to the arbitration clause?
Questions & answers
1. A buyer and seller negotiate by email for the purchase of 500 custom-made widgets at $10 each. The seller's email states: 'I confirm our dealâ500 widgets, $10 each, delivery in 30 days.' The buyer replies: 'Agreed, but please also include a warranty card with each unit.' The seller never responds and later refuses to deliver, claiming no contract was formed. Under UCC Article 2, what is the most accurate statement?
Answer: A contract was formed on the seller's terms; the warranty card term is a proposal for addition and, between merchants, becomes part of the contract unless the seller objects within a reasonable time.
Under UCC § 2-207, a definite expression of acceptance operates as acceptance even if it states additional terms; between merchants, additional terms become part of the contract unless they materially alter it or the offeror timely objects. The seller's confirmation and buyer's reply form a contract, and the warranty card is likely a non-material addition that enters the contract absent objection. Option A applies the common-law mirror-image rule, which UCC § 2-207 displaces; D is wrong because a signed email confirmation satisfies the UCC writing requirement; E imposes a subjective intent test rejected by UCC Article 2.
2. A general contractor orally agrees to hire a subcontractor to install plumbing in a commercial building for $80,000. The subcontractor spends two weeks mobilizing equipment and turning down other jobs in reliance on the agreement. The contractor then repudiates, claiming the oral contract is unenforceable under the Statute of Frauds. The subcontractor sues. Which is the strongest argument for the subcontractor's recovery?
Answer: The subcontractor may recover reliance damages under promissory estoppel if enforcement of the Statute of Frauds would cause injustice, even if the oral contract itself is unenforceable.
Restatement (Second) of Contracts § 139 allows promissory estoppel to overcome the Statute of Frauds when the promisee's reliance was foreseeable and enforcement is necessary to prevent injustice, typically yielding reliance damages. Option B (part performance) is stronger in real property contexts and is weaker here where no performance was rendered on the building itself. Option E is unavailable because no work was performed on the building. Option D misstates the lawârepudiation alone is not fraud.