Pottery Plant Co. has entered into an agreement to buy its actual requirements of potting soil for six months from Green Supplies, a garden supply company. Green Supplies has agreed to sell all the potting soil they will require for six months. The agreement between the two companies is:

Unenforceable because it is too indefinite as to quantity.

Unenforceable because it lacks mutuality of obligation.

Unenforceable because it is illusory.

A valid and enforceable contract.

Motors entered into an oral option with Hap, Inc., for $50. The option was to purchase at cost any late model used yacht received by Motors as a trade in on a new yacht for the next 100 days. Hap paid the $50 in cash and promptly sent Motors a signed memorandum which correctly described the agreement and its terms. Motors did not respond until after 30 days had elapsed and it had discovered they had made a very bad bargain. Motors notified Hap that they would no longer perform under the terms of the option, which they alleged was invalid, and enclosed a check for $50 to Hap. Which of the following is correct?

The oral option is invalid for lack of consideration.

The Statute of Frauds can be validly asserted by Motors to avoid liability.

Motors has entered into a valid contract with Hap.

Options for a duration of more than three months are unenforceable.

Ellie, a 17 year old minor, contracted with Compco to purchase a used computer for $700. The computer was purchased for Ellie's personal use. The agreement provided that Ellie would pay $300 down on delivery and $100 thirty days later over the next four months. Ellie took delivery and paid the $300 down payment. Twenty days later, the computer was seriously damaged as a result of Ellie's negligence. Five days after the damage occurred and one day after Ellie reached the age of majority, Ellie attempted to disaffirm the contract with Compco. Ellie will:

Be able to disaffirm despite the fact that Ellie was not a minor at the time of disaffirmation.

Be able to disaffirm only if Ellie does so in writing.

Not be able to disaffirm because Ellie had failed to pay the balance of the purchase price.

Not be able to disaffirm because the computer was damaged as a result of Ellie's negligence.

Paul Principal decided to buy a sailboat. He felt that it was necessary to investigate comparable boats with different nautical options. Paul was leaving on a trip and he authorized Alice Agent to do the necessary research and purchase the appropriate boat. Alice conducted research and finally decided to purchase a $5,000 Choy Lee 26 foot sloop from Splendid Sailboats Unlimited. She signed the sales contract with Splendid as "Paul Principal by his agent, Alice Agent." When Paul returned from his trip he refused to accept the sailboat or pay the $5,000 to Splendid. Splendid sued Paul and Alice. The likely outcome of the suit is that:

Splendid will prevail against Alice only if Paul refuses to accept the sailboat.

Splendid will prevail against Paul because the purchase was in writing.

Splendid will not prevail against Alice even if she guaranteed the payment of the sailboat purchase contract.

Splendid will not prevail against Alice if she misrepresented the scope of her authority to purchase the sailboat.

Sarah Sailor owned two sailboats, a 32 footer and a 37 footer. Bill Buyer has seen the 37 footer sailboat but not the smaller sailboat. Sarah offered in writing to sell "my sailboat" to Bill for $15,000 cash. Bill accepted and paid Sarah the $15,000 cash.

The next day, Sarah delivered the sailboat to Bill who rejected the tender since it was not the sailboat he thought he was buying. Sarah refused to return Bill's $15,000 payment and insisted that Bill take the smaller sailboat. The best facts supporting Bill's argument to seek relief would be:

Express fraud by Sarah.

A latent ambiguity was known by Sarah but not by Bill.

There was a mutual mistake.

Bill's subjective intent should control requiring reformation of the contract subject.

Elrod is attempting to introduce oral evidence in court to explain or modify the written contract he made with Weaver. Weaver has pleaded the parol evidence rule. In which of the following circumstances will Elrod not be able to introduce the oral evidence?

The modification asserted was made several days after the written contract had been executed.

The contract indicates that it was intended as the "entire contract" between the parties, and the point is covered in detail.

There was a mutual mistake of fact by the parties regarding the subject matter of the contract.

The contract contains an ambiguity on the point at issue.

Stand Glue Corp. offered to sell Macal, Inc., all of the glue it would need in the manufacturing of its furniture for one year at the rate of $25 per barrel, F.O.B. seller's city. Macal accepted Stand's offer. Four months later, due to inflation, Stand wrote to Macal advising Macal that Stand could no longer supply the glue at $25 per barrel, but offered to fulfill the contract at $28 per barrel instead. Macal, in need of the glue, sent Stand a letter agreeing to pay the price increase. Macal is:

Legally obligated to pay only $25 per barrel under the contract with Stand.

Legally obligated to pay $28 per barrel under the contract with Stand.

Not legally obligated to purchase any glue. Stand has breached the contract.

Legally obligated to pay $28 per barrel due to the fact inflation represents an unforeseen hardship.

Brown ordered 100 cases of Delicious Brand apples at list price from Smith Wholesaler stating "prompt shipment." Upon receipt of Brown's order, Smith immediately sent Brown an acceptance which was received by Brown. The acceptance indicated that shipment would be made within ten days. On the tenth day Smith discovered that all of its supply of Delicious Brand apples had been sold. Instead it shipped 100 cases of Lovely Brand apples, stating clearly on the invoice that the shipment was sent only as an accommodation. Which of the following is correct?

Smith's shipment of Lovely Brand apples is a counteroffer, thus no contract exists between Brown and Smith.

Smith's note of accommodation cancels the contract between Smith and Brown.

Brown's order is a unilateral offer, and can only be accepted by Smith's immediate shipment of the goods ordered.

Smith's shipment of Lovely Brand apples constitutes a breach of contract.

Owner, a homeowner, approached Jackson, a licensed painter, to discuss painting his home before he places it up for sale. After several meetings, Owner and Jackson signed a contract which stated Jackson will paint the interior and exterior of Owner's home on or before June 1st. The colors were to be specified by Owner, and Painter was to supply the paint. Owner agrees to pay $22,500 upon completion. The time for performance of these obligations shall be of the essence.

The contract was signed on May 1st. Jackson arrived on the job site on May 15th to begin work. Several weeks later, Jackson went on vacation and did not return until June 2nd. Owner was upset by his continuously not showing up that on June 3rd he hired another painter to finish the job. 

Owner brings an action against Jackson. Who will prevail? 

Owner will recover against Jackson the price he paid to the new Painter hired to do the job since, Jackson did not complete performance.

Owner will prevail since there was a breach of an express condition created between Owner and Jackson.

Jackson, because Owner refused to allow him to finish the job.

Jackson, since Owner refused to let Jackson finish the job which constitutes a breach of contract.