- Under UCC Article 2, is there a contract?
Answer: Yes, because the June 1 offer was irrevocable for three months, and Steel Corp.'s August 1 revocation was ineffective before that period expired.
Under UCC firm-offer rules, a merchant's signed written offer that gives assurance it will be held open is irrevocable without consideration, but in no event for more than three months. The six-month term is therefore limited to three months. Steel Corp. attempted to revoke on August 1, before the three-month period expired, so the revocation was ineffective and Builder's August 5 acceptance formed a contract.
- Can Paul enforce Marta's promise?
Answer: No, because Paul neither knew of the promise nor acted in response to it; there was no acceptance or reliance.
Paul did not know of Marta's promise during the summer, so his volunteer work was not given in exchange for the promise and was not induced by it. There is therefore no bargained-for exchange, no acceptance by performance, and no detrimental reliance. The clinic was not an intended beneficiary of a promise to pay Paul, and no writing requirement applies to this service promise.
- Can Developer enforce Farmer's promise to keep the offer open?
Answer: Yes, because Farmer's signed writing recited consideration for the option, even though Developer never paid it.
A signed written offer that recites purported consideration for making the offer is binding as an option contract if it proposes fair terms for a reasonable time. Actual payment of the recited $1.00 is not required under this rule. Developer's receipt of the writing is not consideration, and an option for land does not require a separate bargained-for exchange when the writing recites consideration.
- Can the university enforce Elena's pledge?
Answer: Yes, because Elena's signed pledge is a charitable subscription that need not be supported by reliance or bargained-for consideration.
A charitable subscription is binding under promissory estoppel without proof that the promise induced action or forbearance. Elena's signed pledge card is a charitable subscription, so the university need not show reliance or a bargained-for exchange. A donative promise is ordinarily unenforceable without consideration or reliance, but the charitable-subscription rule is a recognized exception. Acceptance of the pledge is not what makes it enforceable, and reliance is not required.
- Which statement best describes Ben's likely recovery?
Answer: Ben will recover his proven out-of-pocket losses and other reliance damages, but the court may limit the remedy rather than award the full promised gift.
Under promissory estoppel, a promise that induces reasonable reliance may be binding, but the remedy may be limited as justice requires. When a promise resembles a gift and the reliance is partial, courts generally award reliance damages rather than automatically enforcing the full promised amount. The promise is not unenforceable for lack of consideration, but Ben is not automatically entitled to the entire $50,000 or to speculative profits.
- Which statement is correct under the UCC?
Answer: The modification is enforceable because no consideration is needed for a good-faith modification of a UCC sales contract.
Under the UCC, an agreement modifying a contract for the sale of goods needs no consideration, but it must satisfy the obligation of good faith. Bakery's request was based on a sharp market-price increase, and Catering agreed in a signed writing. The common-law preexisting-duty rule does not govern UCC modifications, and no recited consideration is required.
- Which statement is correct?
Answer: Reed's promise is enforceable because a signed promise to pay an old debt barred only by the statute of limitations is binding without new consideration.
A promise to pay an antecedent debt is binding if the debt would be enforceable except for the running of the statute of limitations. Reed's signed letter acknowledging the debt and promising to pay the balance is such a new promise, so the limitations bar no longer prevents enforcement. The statute of limitations does not extinguish the debt, and the past-consideration objection is overcome by this moral-obligation exception.
