- Who prevails?
Answer: Tenant, because the tender and acceptance of the check created an accord and satisfaction of a bona fide dispute.
When a claim is subject to a good-faith dispute, the debt is unliquidated, and a creditor's acceptance of a tendered check in full satisfaction is an accord and satisfaction. The debtor's payment of the disputed amount and the creditor's surrender of the larger claim supply the required consideration. CleanCo cashed the check with knowledge of the full-satisfaction notation, so the remaining claim was discharged. A incorrectly treats the claim as liquidated, B incorrectly requires a release, and C mischaracterizes the transaction as a modification rather than an accord and satisfaction.
- Is Painter entitled to the additional $1,000?
Answer: No, because Painter was already under a legal duty to finish by August 1 and gave no consideration.
At common law, a modification must be supported by consideration, and a promise to do what one is already legally obligated to do is not consideration. Painter's promise to finish by August 1 was identical to its existing contractual duty, so Homeowner's promise to pay more was not supported by a bargained-for detriment. Inducement and benefit are not enough when the promisee incurred no new detriment, so A and B are wrong. No writing was required for this modification, so C is wrong.
- Is Owner obligated to pay the additional $200,000?
Answer: Yes, because the mutual rescission discharged the original contract and the replacement promises are supported by consideration.
Before either party performed, the parties mutually rescinded the original contract and made a replacement contract. A mutual rescission of an executory contract is supported by the parties' mutual release of rights, and the replacement contract's mutual promises are consideration for each other. Because the original contract was rescinded, Builder's promise to build was no longer a preexisting duty under the new bargain. B and C ignore the effect of the rescission. D is wrong because there is no finding of unforeseen circumstances; the replacement contract is enforceable on consideration grounds.
- Will Bakeries prevail?
Answer: Yes, because the original signed writing satisfied the Statute of Frauds and Article 2 does not require consideration for modifications.
Under the UCC, a modification needs no consideration. The original signed writing satisfied the Statute of Frauds because it identified a quantity term: all the flour Bakeries requires. The Statute of Frauds for goods does not require a price term to be in writing, and an oral reduction of price does not change the quantity term. Therefore the oral modification is enforceable. Requirements contracts are not exempt from the Statute of Frauds, so A is wrong. No new writing was required for the price term, so C is wrong. The UCC eliminated the consideration requirement for modifications, so D is wrong.
- Is Metro obligated to pay Drake the additional $25,000?
Answer: Yes, because the modification was fair and equitable in view of circumstances not anticipated when the contract was made.
At common law, a modification of an executory contract ordinarily requires new consideration, and a preexisting duty cannot serve as consideration. An exception applies when the modification is fair and equitable and is made in response to circumstances not anticipated when the contract was formed. The emergency asbestos regulation was unanticipated, the extra $25,000 matched Drake's added cost, and the contract was still executory. Drake's continued performance was not new consideration, so A is wrong. The general preexisting-duty rule is superseded by the exception, so B is wrong. Because the modification was a fair response to unanticipated circumstances, it was not obtained by duress, so C is wrong.
- Who prevails in Green Grocer's suit against Best Produce?
Answer: Green Grocer, because Best Produce's oral promise was an attempted modification that operated as a waiver, and Green Grocer's reliance makes the waiver irrevocable.
Under UCC 2-209(2), a signed no-oral-modification clause is effective between merchants, so the oral price reduction was not an effective modification. Under UCC 2-209(4), however, an attempted modification that fails because of such a clause can operate as a waiver. Under UCC 2-209(5), the waiving party may retract the waiver upon reasonable notice unless retraction would be unjust because the other party materially changed position in reliance. Green Grocer's binding resale contract at $3.50 per case was material reliance, so Best Produce could not retract the price waiver. Choice A is wrong because the no-oral-modification clause is effective between merchants. Choice C ignores the waiver-and-reliance doctrine. Choice D is wrong because UCC modifications need no consideration and the parol evidence rule does not bar proof of a subsequent modification.
- What will be the result?
Answer: Bakery cannot enforce the oral increase to 12,000 bushels; the contract remains enforceable only as to the 10,000 bushels in the signed writing.
Under UCC Section 2-209(3), the contract as modified must satisfy the Statute of Frauds if it is within the Statute. The original signed writing evidenced a quantity of 10,000 bushels, but no signed writing evidenced 12,000 bushels, so the oral modification was unenforceable. Because the modification failed, the original written contract survived for 10,000 bushels. A ignores the need for a signed writing as to the modified quantity, C incorrectly treats a failed modification as a rescission, and D is unsupported because Grain did not deliver the additional 2,000 bushels and no payment or receipt of those goods took the oral increase out of the Statute of Frauds.
- Who prevails in Mason's suit against Ridge?
Answer: Mason, because the addendum was a fair and equitable modification made in response to circumstances the parties did not anticipate when they formed the original contract.
At common law, a modification of an executory contract generally must be supported by consideration, and a promise to perform an existing contractual duty is not consideration. Under the Restatement, however, a promise modifying a duty under a contract not fully performed on either side is binding if the modification is fair and equitable in view of circumstances not anticipated when the contract was made. The buried drums were not anticipated, removal was required by law, the $40,000 addendum was fair, and the contract was still executory when the modification was signed. Choice B is wrong because Mason's promise to continue was the same duty he already owed. Choice C states the ordinary preexisting-duty rule but ignores the unanticipated-circumstance exception. Choice D is wrong because an integrated writing may be modified by a later agreement; the decisive issue here is not integration but the absence of consideration, which the exception overcomes.
- Is Owner liable for the additional $25,000?
Answer: Yes, because installing the metal roof was not required by the original contract and supplied new consideration.
At common law, a modification is enforceable if the party seeking enforcement gave new consideration. BuildRight was not obligated to install a standing-seam metal roof; the original contract required an asphalt shingle roof. Supplying a different, more valuable roof was a bargained-for detriment and new consideration for Owner's promise to pay the additional $25,000. A incorrectly treats the two roofing obligations as identical, C invents a writing requirement, and D incorrectly asserts that the contractor's performance eliminated the need for consideration.
- Will Style recover the extra $10,000?
Answer: Yes, because a modification extorted in bad faith without a legitimate commercial reason is ineffective.
Under UCC Section 2-209, a modification of a sale-of-goods contract needs no consideration, but it must satisfy the obligation of good faith. Luxe's demand was opportunistic: its own costs had not changed, and it was exploiting Style's lack of alternatives. Because the modification was extorted in bad faith and without a legitimate commercial reason, it is ineffective and Style may recover the extra amount. The signed writing and absence of consideration do not validate a bad-faith modification, so A and B are wrong. The UCC does not require new consideration for a modification, so C is wrong.
- Will Buyer prevail?
Answer: Yes, because Seller's signed confirmation satisfied the Statute of Frauds, and UCC modifications need no consideration.
Under UCC Section 2-201(1), a writing satisfies the Statute of Frauds if signed by the party against whom enforcement is sought. Seller, the party to be charged, signed the confirmation stating the modified quantity of 12,000 widgets, so the Statute of Frauds is satisfied. Under UCC Section 2-201(2), if Buyer were the party resisting enforcement, Buyer's failure to object within ten days to a merchant's signed confirmation would also satisfy the Statute of Frauds against Buyer. Under UCC Section 2-209, the modification needed no consideration. A is wrong because a modified sale-of-goods contract must satisfy the Statute of Frauds when required; B is wrong because silence can satisfy the Statute of Frauds between merchants; D is wrong because Seller, not Buyer, is the party to be charged and Seller signed.
- Who prevails in Seller's suit against Buyer?
Answer: Buyer, because the oral modification increased the total contract price to more than $500 and was not evidenced by a signed writing.
Under UCC 2-209(3), a modification of a sales contract must satisfy the statute of frauds if the contract as modified is within it. The original oral contract was for $400 and therefore outside UCC 2-201; the modified contract was for $600 and therefore within it. Because there was no signed writing sufficient against Buyer, the modification increasing the quantity to 150 reams is unenforceable. UCC 2-201(3)(c) makes an oral contract enforceable only as to goods received and accepted or for which payment has been made and accepted; Buyer accepted only 100 reams, so the additional 50 remain unenforceable. Choice A is wrong because the no-consideration rule does not eliminate the statute-of-frauds requirement. Choice B overstates the part-acceptance exception. Choice D is wrong because oral modifications of sales contracts can be effective when not barred by a no-oral-modification clause or the statute of frauds.
