- Which allocation of the 120,000 bushels is proper?
Answer: AgriCo may allocate the corn in a fair and reasonable manner and may include Grain Mill as a regular customer even though Grain Mill has no contract.
Under UCC §2-615(b), when a seller can make only partial deliveries, it must allocate production and deliveries among customers in a fair and reasonable manner and may include regular customers not under contract as well as its existing contract customers. A is correct. B is too rigid; fair allocation is not necessarily only among contract customers. C is wrong because arbitrary favoritism based on profitability is not fair and reasonable. D is wrong because partial impracticability does not wholly discharge the seller; it must allocate what it can supply.
- Which of the following is Dana's best argument?
Answer: The continued operation of the anchor tenant was a basic assumption underlying the lease, so her duty to pay rent is discharged.
Frustration of purpose discharges a party's duty when an event whose non-occurrence was a basic assumption underlying the contract substantially frustrates the party's principal purpose. Dana might argue that the anchor tenant's continued operation was such a basic assumption and that its closing substantially frustrated her principal purpose of running a studio. But the defense does not succeed merely because her business became unprofitable, nor because performance became financially burdensome; ordinary business risks are assumed. Choice A fails because profitability is not the relevant test, and frustration requires a supervening event undermining a basic assumption, not simply lost expected profits. Choice B invokes impracticability, which excuses performance only when performance itself becomes extremely difficult or costly, not when anticipated benefits decline. Choice D is unsupported by any factual basis for an implied assurance. Thus only the basic-assumption framing of C states the correct doctrine.
- Which statement is correct?
Answer: The estate may refuse to complete the mural, but it must refund the $20,000 advance to prevent unjust enrichment.
Death discharges a contractual duty only when the contract is for personal services requiring the special skill, taste, or judgment of the deceased. Artisan's painting a one-of-a-kind mural was such a contract, so the estate is discharged from completing it. However, because the contract was discharged by supervening impracticability, restitution requires the estate to return the unearned advance. A is wrong because the contract was personal and could not be delegated without consent. C is wrong because discharge does not forfeit the buyer's payment. D is wrong because the contract is discharged, not voidable.
- What are Buyer's rights?
Answer: Buyer may avoid the whole contract, or accept the tile set with a due allowance from the price, but may not require replacement.
UCC §2-613(b) governs casualty to identified goods before risk passes: if the loss is partial, the buyer may either avoid the contract or accept the damaged goods with a due allowance in price, with no further right against the seller. Buyer therefore cannot compel replacement or keep only the undamaged portion at the full price. A and B incorrectly convert the seller's risk into an obligation to substitute, and D is wrong because avoiding the contract is the termination of duties, not a predicate for breach damages.
- If Ben refuses to pay the price, will Ava succeed in an action for the price?
Answer: No, because the specific novel was destroyed through no fault of either party before risk of loss passed to Ben, so the contract is avoided.
Under UCC Article 2, when identified goods are destroyed through no fault of either party before the risk of loss has passed to the buyer, total loss avoids the contract. Here, the contract was for the sale of a specifically identified book, and Ben had not yet received it. Because Ava is a merchant-seller, risk of loss would not pass to Ben until he received the book at her shop. The fire was not Ben's fault, so he did not assume the risk by failing to take delivery before the agreed pickup time. Thus Ava cannot recover the price. Choice A is wrong because ownership transfer is not the UCC's risk-of-loss test. Choice B is wrong because casualty to identified goods is an excuse even without an express condition. Choice C is wrong because Ben had not breached; his performance was not yet due.
