B. Law 420
Exam #1, Spring 2009
March 5, 2009
Multiple choice portion:
Each question is 2 points, total 70 points.
Select the best answer.
m/c and essay portions follows the exam.
Able entered into an oral contract with Baker for the sale of Able's car for $5,000. Later Baker
breached that contract. Able wants to sue to enforce the contract. Under the Statute of Frauds, who is the
"party to be charged" in this case?
c. Both Able and Baker.
d. Neither Able nor Baker, because this is a contract for the sale of goods.
Chen, a retail seller of fruit, entered into a contract for the purchase of 10 bushels of peaches from
Georgina, at a price of $5 per bushel. Delivery was to be in one month. One week after this contract was
formed, unexpected cold weather destroyed most of the peach crop and prices doubled. Georgina asked
Chen if he would agree to a price increase to $7 per bushel, to help her absorb some of her loss. Chen
agreed. However, after the peaches were delivered, Chen refused to pay more than $5 per bushel.
a. Chen must pay the higher price because the UCC does not require consideration in this case.
b. Chen must pay the higher price because he accepted delivery of the peaches.
c. Chen does not have to pay the higher price because the UCC requires consideration in exchange for a
promise to pay a higher price than in the original contract.
d. Chen does not have to pay the higher price because a valid original contract cannot be modified.
Jerry's Hardware Co. (JHC) of Moscow Idaho, a retailer, sent a communication with the heading
"Purchase Order" to Chicago Hardware (CH) of Chicago Illinois, a wholesaler.
This purchase order was
based on a price list that CH had sent four months earlier.
JHC's purchase order stated the price, quantity
and terms of payment for $5,000 of hardware goods.
On the back of JHC's purchase order form there
were 16 numbered clauses.
None of these clauses dealt with how to resolve a dispute, should one later
CH received the purchase order and responded with a communication that had the heading "Order
CH's order confirmation stated the same prices, quantities, and terms of payment as those
contained in JHC's form.
However, on the back of CH's form there was a clause that stated that if a
dispute should arise over this transaction, the dispute would be resolved through arbitration. A dispute
later arose. How should it be resolved?
a. By litigation, because CH proposed an additional term that was not incorporated into the contract.
b. By litigation, because CH proposed a different term that was not incorporated into the contract.
c. By arbitration, because CH proposed an additional term, that was incorporated into the contract.