ANSWERS TO PROBLEMS

INTRODUCTION TO SALES CHAPTER 21

1. Answer: Contractual Modifications/Statute of Frauds. No. This problem brings out two situations: (1) can the contract be modified without consideration and (2) what is the effect, if any, of the oral agreement upon the modification. Concerning point number 1 the U.C.C. Section 2-209(1) provides the “the modification of a contract within this article needs no consideration to be binding." However; the Statute of Frauds provision, U.C.C. Section 2-201, renders this oral modification unenforceable. A contract for the sale of goods in the amount of $500 or more must be in writing and signed by the party to be charged or her authorized agent or broker or otherwise comply with the requirements of the Statute. The key concerning a modification of a prior contract is whether the modification brings or retains the contract within. the Statute of Frauds, i.e., whether the contract as modified is for $500 or more-which, it is as it is a modification that retains the contract within the Statute (i.e. it keeps the contract at $5,000 here).

2. Answer: Sales By and Between Merchants. Ten days after receiving the letter International Widget would be bound by the written memorandum as if they signed it. U.C.C. Section 2-201 (2) provides that between merchants a written confirmation sent within a reasonable time which is sufficient against the sender (i.e. signed by the sender) is also sufficient against recipient of the confirmation provided the recipient has reason to know its contents and provided the recipient does not give written notice of his objection within 10 days of receipt.

6. Answer: Irrevocable Offers. Decision for Bowman. Acorn's offer of November 23 constituted a firm offer and could not be revoked for the specified period of time (10 days). Hence Acorn's attempted revocation of the offer on November 25 is ineffective. A firm offer is a written offer signed by a merchant which by its terms gives assurance that is will be held open for a period of time, which cannot exceed three months without condideration. U.C.C. 2-205. Bowman validly accepted Acorn's offer on Dec 1, while the offer is still open, by dispatching, by a reasonable means of acceptance, his acceptance. It is irrelevant on what date the acceptance was received by Acorn. Since the UCC does not address the issue, the common law rules on acceptance apply and thus acceptance is effective upon dispatch here.

PERFORMANCE CHAPTER 22

1. Answer: (a) Rejection. Kristine has lost her right to reject the machine, although she has a cause of action for damages against the seller if there is a breach of warranty. Upon learning that the machine was defective and that it did not conform to the contract of sale, Kristine could have rejected it by promptly notifying the seller and returning it to the seller or tendering it to him. However, Kristine's continued use of the machine for three months after knowledge of the defect was an acceptance of the goods which precludes rejection. U.C.C. §2-607.
(b) Revocation of Acceptance. Kristine would have the right to revoke if (1) she accepted the machine on the reasonable assumption that its non-conformity would be cured, (2) it has not been seasonably cured and (3) the non-conformity substantially impairs the value of the machine. If these conditions are met Kristine may revoke her acceptance if she does so within a reasonable time after the seller fails to seasonably cure. U.C.C. §2-608(2).
2. Answer: Inspection. Judgment for Beyer who has the right of inspection under U.C.C Section 2-513. The contract did not by its terms provide for payment of the price C.O.D or upon presentation of documents of title, nor did Beyer in any other way waive his right of inspection. The refusal of Smith to permit Beyer to inspect the goods, where Beyer has not agreed or contracted to give up his right of inspection, is justification for Beyer's refusal to pay for the goods.