Contract formation and modification under the UCC - Next Generation Bar Exam

1. Under the majority view, how are different (conflicting) terms in an offer and an acceptance treated?

   They knock each other out, and UCC gap-fillers supply the term. Courts are divided; the knockout rule is the majority approach, while some courts let the offeror's term control.

2. Under UCC 2-204, when does a sales contract not fail for indefiniteness despite open terms?

   When the parties intended to contract and there is a reasonably certain basis for giving a remedy. The UCC's gap-filling provisions supply missing terms such as price, delivery, and payment.

3. Under UCC 2-207, when does a definite expression of acceptance form a contract despite stating additional terms?

   Unless the acceptance is expressly made conditional on assent to the additional terms. The UCC rejects the common-law mirror-image rule for the sale of goods.

4. When must a modification of a sales contract satisfy the statute of frauds?

   When the contract as modified is within the statute, such as a sale of goods for $500 or more. The writing requirement applies to the contract as it stands after the modification.

5. How may a party retract a waiver affecting an executory portion of a sales contract?

   By reasonable notice that strict performance will be required, unless retraction would be unjust because of reliance. UCC 2-209(5) protects a party who has materially changed position in reliance on the waiver.

6. When the parties' writings do not form a contract but their conduct recognizes one, what are the contract's terms?

   The terms on which the writings agree, plus terms supplied by the UCC. Under UCC 2-207(3), neither party's unmatched boilerplate controls.

7. What makes an offer to buy or sell goods a firm offer under UCC 2-205?

   A merchant's signed writing that gives assurance it will be held open. A firm offer is irrevocable without consideration for the stated time, or a reasonable time, but never more than three months.

8. When is a seller's shipment of nonconforming goods not an acceptance of an order?

   When the seller seasonably notifies the buyer that the shipment is offered only as an accommodation. An accommodation shipment is a counteroffer that the buyer may accept or reject.

9. Under UCC 2-204, what is sufficient to form a contract for the sale of goods?

   Conduct by both parties recognizing the existence of a contract, even if the moment of formation is unclear. The UCC focuses on whether the parties agreed, not on a formal offer and acceptance.

10. When at least one party is not a merchant, how is an additional term in an acceptance treated?

    As a proposal that becomes part of the contract only if the offeror agrees to it. Silence by a non-merchant offeror does not add the term.

11. Between merchants, when does an additional term in an acceptance fail to become part of the contract?

    When the offer limits acceptance to its terms, the term materially alters the contract, or the offeror timely objects. Absent any of these, an additional term becomes part of the contract automatically between merchants.

12. Under UCC 2-209, what is the effect of a clause requiring that modifications be in a signed writing?

    An unwritten modification is ineffective, though the attempt may operate as a waiver. Between a merchant and a consumer, such a clause on the merchant's form must be separately signed by the consumer.

13. Under UCC 2-206, how may an order for prompt shipment be accepted?

    By a prompt promise to ship or by prompt shipment of conforming or nonconforming goods. Shipment of nonconforming goods is both an acceptance and a breach, unless offered as an accommodation.

14. Under UCC 2-209, what is required for a modification of a sales contract to be binding?

    Good faith; no consideration is needed. A modification extorted without a legitimate commercial reason violates the good-faith requirement.

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