- Is the new three-year contract enforceable? Select one.
Answer: Yes, because the parties mutually agreed to rescind the original contract and enter into a new one.
The correct answer is C. This scenario illustrates a valid method of modifying a common law contract to avoid the pre-existing duty rule. The parties can mutually agree to rescind the existing contract and then enter into a new, different contract. The consideration for the rescission is each party's discharge of the other's remaining duties. The new contract is then formed with new consideration from both sides (the athlete's promise to play for three more years, the team's promise to pay the higher salary). This is not considered a mere modification but a substitution of contracts. A is incorrect because the mutual rescission effectively terminated the pre-existing duty. B is incorrect because while motivated by past performance, the new contract involved new promises for future performance on both sides. D is an illogical compromise; the new contract is either valid in its entirety or not at all.
- If a dispute arises over the specification change, is the oral modification enforceable? Select one.
Answer: Yes, because the parties' conduct of delivering and accepting the modified goods operated as a waiver of the writing requirement.
The correct answer is D. This contract is for the sale of goods, governed by UCC Article 2. Under UCC § 2-209(2), a no-oral-modification (NOM) clause is effective. However, under § 2-209(4), an attempted modification that is not in writing but should be can operate as a waiver. Here, the parties acted in reliance on the oral modification—the manufacturer delivered the modified component and the buyer accepted it. This course of performance constitutes a waiver of the NOM clause with respect to the goods already delivered and accepted. A is incorrect because it ignores the waiver provision of the UCC. B is incorrect because the UCC does not require consideration for modifications. C is incorrect because NOM clauses are generally enforceable under the UCC, unlike at common law.
- If the department store later sues the designer for breach of contract for failure to deliver the full 500 dresses, what is the designer's best defense? Select one.
Answer: The buyer's oral statement constituted a waiver of the right to receive the full quantity, on which the designer relied.
The correct answer is B. This is a UCC Article 2 contract with a no-oral-modification (NOM) clause. Under UCC § 2-209(2), such clauses are effective. Therefore, the oral agreement to reduce the quantity was not a valid modification. However, § 2-209(4) states that an attempted modification can operate as a waiver. The buyer's oral statement agreeing to the lesser quantity can be construed as a waiver of the strict performance term. The designer then relied on this waiver by shipping the 450 dresses. This reliance makes the waiver enforceable, at least for this particular delivery. A is incorrect because the NOM clause made the oral modification invalid. C is incorrect because NOM clauses are specifically validated by the UCC, especially between merchants. D is incorrect because the UCC has a "perfect tender" rule, and substantial performance is not the primary defense, although the concepts are related; waiver is the more direct and accurate defense here.
- Is the owner's promise to relinquish the termination right an enforceable modification? Select one.
Answer: No, because the promise was based on past consideration and your client provided no new consideration.
The correct answer is A. This is a services contract modification governed by common law. The owner's promise to give up a valuable legal right (the right to terminate for convenience) must be supported by new consideration from your client. The letter explicitly states the reason is "excellent work," which is past performance and therefore not valid consideration. Your client did not promise anything in return—they were already obligated to manage the property. Therefore, the owner's promise is a gratuitous one and unenforceable. B is incorrect because while the modification was in writing, it still lacks consideration. C states a rule that exists in a few jurisdictions by statute but is not the general common law rule. D is a promissory estoppel argument, but it is weak here because the client was just continuing to perform its pre-existing duty, so it is difficult to show detrimental reliance.
- If the contractor completes the kitchen by June 1 and the homeowner refuses to pay the additional $5,000, is the contract modification enforceable? Select one.
Answer: No, because the contractor had a preexisting legal duty to complete the renovation for $30,000 and offered no new consideration.
The correct answer is C. This is a contract for services, governed by the common law. Under the common law's pre-existing duty rule, a promise to pay more for performance that a party is already contractually obligated to render is unenforceable due to a lack of new consideration. Here, the contractor was already obligated to finish the kitchen for $30,000. The internal staffing issues of the contractor are considered normal business risks, not the type of unanticipated circumstances that would excuse the pre-existing duty rule under the modern trend (Restatement § 89). Therefore, the homeowner's promise to pay more is not supported by consideration. A is incorrect because satisfying the Statute of Frauds does not cure a lack of consideration. B is incorrect because employee turnover is a foreseeable business risk, not an unanticipated circumstance that would make a modification without consideration enforceable. D is incorrect because while there was pressure, the contractor's threat to breach due to increased costs is generally not sufficient to constitute legal duress.
- When the first monthly installment is due, the manufacturer demands the full balance, citing the written contract. Is the oral agreement to allow installment payments enforceable? Select one.
Answer: Yes, because the manufacturer waived the original payment term by orally agreeing to the new arrangement and delivering the lathe.
The correct answer is C. This is a UCC contract for the sale of goods. The contract contains an effective no-oral-modification (NOM) clause under UCC § 2-209(2). Therefore, the oral agreement to change the payment terms is not a valid modification. However, the manufacturer's oral agreement, coupled with its subsequent performance (delivering the lathe), can be seen as a waiver of the single-payment term under § 2-209(4). The machine shop relied on this waiver by accepting the lathe. The manufacturer cannot unilaterally retract the waiver after the shop has relied on it. A is incorrect because it ignores the waiver exception. B is incorrect because the UCC does not require consideration for modifications. D states the requirement for a valid modification, but the oral agreement failed as a modification due to the NOM clause; it is only enforceable as a waiver.
- Is the general contractor's promise to pay the increased cost enforceable? Select one.
Answer: Yes, because the unavailability of the specified brand was an unforeseen difficulty, making the modification fair.
The correct answer is D. This common law services contract modification is enforceable under the modern trend articulated in the Restatement (Second) of Contracts § 89. The sudden unavailability of the specified material due to a fire is a classic example of an unanticipated circumstance. The modification to substitute an equivalent material at a slightly higher cost is fair and equitable under these circumstances. Therefore, the general contractor's promise to pay is binding even without separate new consideration. A ignores this important exception to the pre-existing duty rule. B incorrectly applies impossibility; the duty was likely not discharged, only made more difficult (impracticable), and the parties chose to modify rather than discharge the contract. C is a plausible answer, but D provides the more accurate reason. The new consideration (using a different brand) is part of the modification itself, which is justified by the unforeseen difficulty.
- Is the client's promise to pay the additional $3,000 enforceable? Select one.
Answer: Yes, because the accountant provided new consideration by agreeing to complete the audit despite the client's delays.
The correct answer is D. While the accountant had a pre-existing duty, the client's own actions (failing to provide documents) hindered performance and could be seen as a breach of the implied duty of good faith and fair dealing. In this situation, the original obligations are in dispute. The accountant's agreement to continue working and meet the deadline despite the client-caused difficulties can be viewed as new consideration. It is more than what was required under the original bargain, which implicitly assumed reasonable cooperation from the client. A is incorrect because it overlooks the impact of the client's hindrance. B is incorrect because a threat to stop work in response to the other party's breach is not improper duress. C is a close answer, but it focuses on excuse from performance rather than the validity of the modification; the accountant did not seek to be excused but instead agreed to a new deal, making D the better answer about the enforceability of that new deal.
- Is the written modification increasing the fee to $5,000 enforceable? Select one.
Answer: Yes, because the agreement arose from a disputed performance and represents a settlement of that dispute.
The correct answer is C. This scenario involves a good-faith dispute over performance under the original contract. When parties have a genuine disagreement about their obligations, a subsequent agreement to resolve that dispute (often called a settlement or an accord) is enforceable. The consideration for the new agreement is the surrender of each party's claims under the old agreement. Here, the company's promise to pay more and the designer's promise to create entirely new concepts constitute a valid modification that settled their dispute. A is not the best answer; while the writing is evidence, it's the underlying settlement that provides the consideration. B is incorrect because the scope of the duty was in dispute. D is incorrect as a good-faith disagreement and hard bargaining do not rise to the level of duress.
- Is the oral agreement to modify the chip specification and price enforceable? Select one.
Answer: Yes, because the modification was supported by new consideration from both parties.
The correct answer is A. This question can be resolved under both the UCC and common law, but A is the most universally correct answer. The tech company agreed to pay more, and the supplier agreed to provide a different, more advanced chip. This exchange of new duties constitutes valid consideration, making the modification enforceable even under the stricter common law standard. Under the UCC, which governs this sale of goods, consideration is not required for a modification (§ 2-209), but its presence makes the modification even more secure. B is incorrect because while the contract as modified is for over $500, an oral contract for goods can be enforceable under the UCC to the extent that the goods have been received and accepted (§ 2-201(3)(c)). Here, the supplier produced and shipped all the chips. C is incorrect because modifications may require a writing under the Statute of Frauds. D raises an agency issue, but there are no facts to suggest the representative lacked authority; sales representatives typically have apparent authority to agree on price and specifications.
- Assuming the farmer later refuses to deliver the barley, is the oral agreement for the barley enforceable against her? Select one.
Answer: Yes, because the miller's confirmatory email satisfied the UCC Statute of Frauds against the farmer.
The correct answer is C. The agreement concerns the sale of goods (crops), so the UCC applies. Although this could be viewed as a new contract, it's presented in the context of modifying the parties' overall relationship. The key issue is the Statute of Frauds. A contract for the sale of goods for $500 or more is not enforceable unless there is some writing signed by the party against whom enforcement is sought. Here, the barley agreement is for $50,000. However, the UCC's "merchant's confirmatory memo" rule (§ 2-201(2)) provides an exception. Both the farmer and miller are merchants with respect to crops. The miller sent a writing in confirmation of the contract within a reasonable time, and the farmer, having reason to know its contents, did not object in writing within 10 days of receipt. Therefore, the memo satisfies the Statute of Frauds against the farmer. A is not the best answer because the primary hurdle is the Statute of Frauds, not consideration. B is incorrect because it overlooks the merchant's confirmatory memo exception. D is incorrect because the parol evidence rule does not apply to subsequent modifications.
- Is the developer's oral promise to pay the additional $40,000 legally enforceable? Select one.
Answer: Yes, because the discovery of the spring was an unanticipated circumstance making the modification fair and equitable.
The correct answer is A. This is a services contract governed by common law. While the pre-existing duty rule would typically bar enforcement of a promise to pay more for the same work, there is a significant exception for unanticipated circumstances. Under the Restatement (Second) of Contracts § 89, a modification is binding if it is fair and equitable in view of circumstances not anticipated by the parties when the contract was made. The discovery of a major, un-surveyed spring system is a classic example of such a circumstance. The modification is fair, so it is enforceable even without new consideration. B incorrectly states the modern rule; while parties can assume such risks, the default rule allows for modification in these circumstances. C is incorrect because the parol evidence rule applies to prior or contemporaneous agreements, not subsequent modifications. D is arguably true, but A provides the more precise legal reason for the modification's enforceability under the modern common law trend.
- Is the university's promise to pay the $5,000 stipend enforceable? Select one.
Answer: Yes, because the professor's performance of additional duties beyond those specified in her original contract constitutes valid consideration for the modification.
The correct answer is A. Under contract law, a modification must be supported by consideration. The professor's original contract specified only teaching duties. The undergraduate advisor role was additional work not required by the original agreement, so performing these duties constitutes new consideration that supports the modification. B is incorrect because the statute of frauds requires written agreements only for contracts that cannot be performed within one year; this modification could be performed within one year. C is incorrect because the professor's duties were contractually defined, not open-ended. D states a valid legal theory but A provides the stronger contract-based analysis.
- Before the third month's rent is due, the landlord informs the tenant that all future payments must be made on the 1st of the month, per the written lease. Is the landlord's demand effective? Select one.
Answer: Yes, because even if the landlord's conduct constituted a waiver, the waiver can be retracted for future payments with reasonable notice.
The correct answer is D. While no-oral-modification clauses in contracts not governed by the UCC (like leases) are often not strictly enforced, the landlord's conduct of accepting late payments can be seen as a waiver of the right to demand payment on the 1st for those specific months. However, a waiver of a condition can be retracted for future performances, provided the other party has not materially relied on the waiver and is given reasonable notice of the retraction. Here, the landlord gave notice before the next payment was due, allowing the tenant to comply. Therefore, the landlord can retract the waiver and reinstate the original payment date. A is incorrect because a waiver through course of performance does not automatically result in a permanent modification. B is incorrect as continued occupancy was a pre-existing duty. C is an overstatement; while the NOM clause is a strong argument, the conduct of the parties can create a waiver or estoppel argument, making D the more precise answer.
- Is the homeowner obligated to pay the full $25,000 contract price? Select one.
Answer: No, because the oral modification to lower the price is enforceable against the architect.
The correct answer is C. This is a common law contract for services. At common law, no-oral-modification clauses are generally not enforced on the theory that parties can orally modify any part of their agreement, including the clause that forbids oral modifications. The oral agreement to substitute cheaper materials for a presumably lower price (or as a favor) is a valid subsequent agreement. It is supported by consideration: the architect's consideration is the cost savings, and the homeowner's consideration is accepting a non-conforming, cheaper material. Therefore, the oral modification is enforceable. A is incorrect because it applies the UCC rule for NOM clauses to a common law contract. B is incorrect because there was consideration. D is a possible alternative theory, but C is the more direct contract law answer.
- What is your client's best argument for enforcing the oral agreement to pay the additional $15,000? Select one.
Answer: The agreement is enforceable because the client provided new consideration by adding significant features not required by the original contract.
The correct answer is B. The contract is for the creation of custom software, which is generally treated as a service contract governed by common law. Under the common law, a modification requires new consideration. Here, the client provided new consideration by agreeing to add significant features that were outside the scope of the original contract. This is not a case of merely promising to perform a pre-existing duty; it is a promise to do more. Therefore, the corporation's reciprocal promise to pay more is enforceable. A is incorrect because this is a services contract, not a contract for the sale of goods, so the UCC does not apply. C describes waiver, which is more relevant to NOM clauses or conditions, but lack of consideration is the primary issue here. D is incorrect because the one-year provision of the Statute of Frauds is not the relevant rule; the issue is consideration.
- If the furniture maker delivers only the original 100 chairs, and the restaurant sues for breach of the modified agreement, is the oral modification enforceable? Select one.
Answer: No, because the contract as modified was for the sale of goods for $500 or more and the modification was not in writing.
The correct answer is C. The contract is for the sale of goods (chairs) and is governed by UCC Article 2. The key issue is the Statute of Frauds, UCC § 2-201. A contract for the sale of goods for $500 or more must be in writing to be enforceable. This requirement also applies to modifications. The original contract for $50,000 was presumably in writing. The modified contract is for $60,000. Because the contract as modified falls within the Statute of Frauds, the modification itself must satisfy the Statute of Frauds. Since the modification was purely oral, it is unenforceable. A is a correct statement of law (UCC § 2-209(1)) but misses the dispositive Statute of Frauds issue. B is incorrect because being merchants does not excuse the writing requirement of the Statute of Frauds. D is incorrect because the parol evidence rule pertains to prior or contemporaneous agreements, not subsequent ones.
- Is the contract amendment providing for additional payment enforceable? Select one.
Answer: Yes, because the enactment of the new wage law was an unanticipated circumstance that made the modification fair and equitable.
The correct answer is B. This is a services contract, so common law rules apply. The pre-existing duty rule is at issue. However, the Restatement (Second) of Contracts § 89 allows for a modification without new consideration if it is fair and equitable in view of unanticipated circumstances. A new law that directly and substantially increases the cost of performance is a prime example of such a circumstance. It was not anticipated by the parties, and adjusting the price to account for the new legal requirement is fair. A incorrectly states that the company assumed this risk; while possible, it's not the default rule, and the § 89 exception is designed for this situation. C states a policy argument but not a legal rule of contract modification. D is a weak argument; while true, the better legal basis is the unanticipated circumstance exception.
- Is the client's promise to pay the additional $2,000 per month bonus enforceable? Select one.
Answer: No, because the promise was to pay for services the firm was already contractually obligated to perform.
The correct answer is C. This is a services contract governed by common law. The client's promise to pay a bonus is a proposed modification. To be enforceable, this modification must be supported by new consideration from the consulting firm. Here, the firm continued to provide the exact same services it was already required to provide under the original contract. This is a classic application of the pre-existing duty rule. The promise to pay more for the same performance is unenforceable for lack of consideration. A is incorrect because promissory estoppel typically applies where there is no contract; here, there is one, and reliance on a gratuitous promise within an existing contract is less likely to be enforced. B is incorrect because past consideration (the excellent results already delivered) is not valid consideration for a new promise. D is incorrect because the UCC's $500 threshold does not apply to services contracts, and the one-year rule for the Statute of Frauds is not implicated as the contract could be performed within one year from its making.
- Is the promise to grant the additional 5,000 stock options an enforceable modification of the employment contract? Select one.
Answer: No, because the engineer was already obligated to work for the company and provided no new consideration for the extra options.
The correct answer is C. This is an employment contract, governed by common law. The promise of additional options is a modification that, to be enforceable, requires new consideration from the engineer. The engineer did not promise to stay for a longer term, take on new duties, or give up any legal right. She was already obligated to work for the company under the existing contract. Therefore, the promise is a gratuitous one, unenforceable for lack of consideration, based on the pre-existing duty rule. A is incorrect because continued at-will employment can sometimes be consideration, but here the engineer had a term contract, so simply continuing to work was her pre-existing duty. B is incorrect because past consideration is not valid consideration. D is incorrect because the original contract was in writing, and the issue is lack of consideration, not the Statute of Frauds.
