Bar Exam (Uniform) Quiz: Ucc Gap Filling
20 questions · exam conditions
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Ucc Gap FillingQuestion 1 of 20

No payment term. Seller ships conforming goods by carrier. Buyer must pay:

Upon delivery to carrier
After opportunity to inspect
Before any inspection is made
At the time of contracting
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Bar Exam (Uniform) Quiz

Bar Exam (Uniform) Quiz: Ucc Gap Filling

Practice Ucc Gap Filling in Bar Exam (Uniform) with focused quiz questions that help you check what you know, review explanations, and build confidence with test-style prompts.

What this quiz covers

This quiz focuses on Ucc Gap Filling, giving you a quick way to practice the rules, question types, and explanations that matter most for Bar Exam (Uniform).

How to use this quiz

Try each quiz question before looking at the correct answer. Use the explanations to review missed ideas, then come back to similar questions until the pattern feels familiar.

All questions

Question 1

No payment term. Seller ships conforming goods by carrier. Buyer must pay:

  1. Upon delivery to carrier
  2. After opportunity to inspect (correct answer)
  3. Before any inspection is made
  4. At the time of contracting
Explanation: Unless the contract says otherwise, payment is due when you receive the goods, and you have the right to inspect them before paying. Delivery terms affect risk and shipping costs, not the timing of payment. The tempting wrong answer is payment upon delivery to the carrier, because risk may pass then, but you still get a reasonable opportunity to inspect before paying.

Question 2

Contract is silent on delivery. Identified goods sit in a Kentucky warehouse known to both parties. Seller must tender:

  1. At the Kentucky warehouse (correct answer)
  2. At seller's place of business
  3. At buyer's place of business
  4. At a reasonable location
Explanation: Because the goods are identified and both parties know they are sitting in the Kentucky warehouse, UCC 2-308 makes that location the place for delivery. The tempting default of seller's place of business applies only when the goods are not identified and known to be elsewhere. So tender must occur at the Kentucky warehouse.

Question 3

A writing says 'Buyer will buy all widgets it requires,' no number. This quantity term is:

  1. Too indefinite to enforce
  2. Buyer may demand any amount
  3. Enforceable as requirements (correct answer)
  4. Requires a stated maximum
Explanation: A requirements contract is enforceable even without a stated number: the buyer promises to buy all widgets it actually requires, and the seller supplies that amount. Your real needs set the standard of performance, so the term is definite enough. The tempting mistake is calling it too indefinite to enforce, but the law fills the gap by requiring good faith.

Question 4

Price was to follow an index that is discontinued before delivery. Seller delivers. Buyer owes:

  1. Last quoted index price
  2. No price; contract fails
  3. Reasonable price at delivery (correct answer)
  4. Seller's own list price
Explanation: The index was the agreed way to set the price, but when it is discontinued before delivery, the contract does not fail. The UCC fills the gap by requiring the buyer to pay a reasonable price at delivery. The tempting wrong answer is no price because the index is gone, but the parties clearly intended a sale, so a reasonable price is supplied instead.

Question 5

An installment contract has no end date. Seller stops after 3 years. Which is true?

  1. Void for indefiniteness
  2. Perpetual until terminated
  3. Three years by implication
  4. Runs for a reasonable time (correct answer)
Explanation: An installment contract that specifies no end date is enforceable and lasts only for a reasonable time, so the seller's stop after three years is judged by that standard. The tempting error is to treat it as perpetual until terminated, but the law won't impose an endless obligation; reasonable time and reasonable notice govern termination.

Question 6

You are advising a client, a bookstore, that made an oral agreement with a publisher to purchase 200 copies of a bestselling novel for $3,000. The parties did not discuss delivery arrangements. The publisher's warehouse is in New Jersey, and the bookstore is in New York. The bookstore expected the publisher to deliver the books, as is common in the industry. The publisher argues the books are available for pickup at its warehouse and refuses to ship them. Your client wants to know its rights.

  1. The publisher must deliver the books to the bookstore, because trade usage is part of the agreement and can supplement its terms. (correct answer)
  2. The bookstore must pick up the books from the publisher's warehouse, because this is the UCC's default rule.
  3. The oral contract is unenforceable under the Statute of Frauds, so the delivery issue is moot.
  4. The parties must share the cost of shipping because the contract is silent on the issue.
Explanation: The correct answer is A. While UCC § 2-308's default rule is delivery at the seller's place of business, this rule applies only if 'otherwise agreed.' Under UCC § 1-303, a usage of trade can be part of the agreement. The facts state that it is 'common in the industry' for publishers to deliver. This trade usage would supplement the written terms and override the UCC gap-filler. Therefore, the publisher is obligated to deliver. B is incorrect because it applies the gap-filler without considering that trade usage can constitute an agreement to the contrary. C is incorrect because the oral contract for goods over $500 is enforceable under the Statute of Frauds up to the quantity of goods for which payment has been made and accepted or which have been received and accepted. More importantly, the question asks about the delivery term, assuming a valid contract. D is incorrect as there is no UCC rule for sharing shipping costs.

Question 7

A boat builder contracted to sell a custom-built yacht to a buyer for $500,000. The contract specified all details of the yacht's construction. Regarding payment, the contract stated only, 'Payment due upon completion.' The contract was silent on the location of payment or delivery. When the yacht was completed at the builder's shipyard, the builder telephoned the buyer and demanded payment be wired to its bank account before the buyer could take possession. The buyer insisted on paying by certified check at the shipyard at the same time he takes delivery.

  1. The buyer must wire the funds as demanded because payment is due upon completion.
  2. The buyer is entitled to take possession of the yacht and pay within a reasonable time thereafter.
  3. The buyer is entitled to inspect the yacht before payment is due, and payment is due upon tender of delivery. (correct answer)
  4. The contract is unenforceable because the terms of payment and delivery are too indefinite.
Explanation: The correct answer is C. Under UCC § 2-310(a), unless otherwise agreed, payment is due at the time and place at which the buyer is to receive the goods. Furthermore, under UCC § 2-513, the buyer has a right before payment or acceptance to inspect the goods at any reasonable place and time and in any reasonable manner. The builder's demand for a wire transfer before the buyer receives the goods contradicts these default rules. The buyer's position aligns with the UCC: payment is due upon tender of delivery, which also affords the buyer the right to inspect. A is incorrect because the builder's demand for pre-payment via wire transfer is not supported by the UCC's default rules. B is incorrect because payment is concurrent with delivery, not due a reasonable time after. D is incorrect because the UCC provides gap-fillers for these terms.

Question 8

A buyer and a seller orally agreed over the phone for the sale of 50 custom-printed signs for $1,000. During the call, they agreed on the design, quantity, and total price, but did not discuss when payment was due. The seller delivered the signs to the buyer's shop. The buyer accepted the signs but refused to pay, claiming the contract is invalid because they never agreed on payment terms.

  1. The contract is valid, and payment was due when the buyer received the signs. (correct answer)
  2. The contract is unenforceable because the payment term, an essential element, was not agreed upon.
  3. The contract is invalid under the Statute of Frauds because it was an oral agreement for goods over $500.
  4. The contract is valid, and payment is due within 30 days of delivery, according to standard commercial practice.
Explanation: This question tests your understanding of contract formation, particularly how courts handle missing terms and the Statute of Frauds for goods contracts. When parties form a contract but leave certain terms unspecified, the law doesn't automatically void the agreement. Instead, courts will supply reasonable terms to make the contract workable, especially when the essential elements (offer, acceptance, consideration) are present. Here, the parties agreed on the core terms: specific goods (50 custom signs), quantity, and price ($1,000). The absence of payment timing doesn't invalidate the contract. Under the UCC, which governs sales of goods, when payment terms aren't specified, payment is due at the time and place where the buyer receives the goods. Since the buyer accepted delivery, payment became due immediately upon receipt. Why the wrong answers miss the mark: Answer B incorrectly assumes that every contract term must be explicitly negotiated - the law fills gaps with reasonable terms rather than voiding contracts. Answer C misapplies the Statute of Frauds; while contracts for goods over $500 generally require writing, there's an exception when goods are specially manufactured for the buyer and not suitable for sale to others in the ordinary course of business, which applies to custom-printed signs. Answer D incorrectly imposes a 30-day payment period that has no basis in law when goods are received. Remember: The UCC favors contract enforcement and provides default terms when parties leave gaps. Focus on whether the essential elements exist rather than whether every detail was negotiated.

Question 9

A coffee roaster and a café owner signed a document that stated: 'The parties agree to the sale of 500 pounds of whole bean coffee. We will agree on the price and delivery date next week, and if we do not, this agreement is null and void.' The parties subsequently failed to agree on a price. The café owner argues that a contract exists and a court should supply a reasonable price.

  1. A contract exists, and the price is a reasonable price at the time of delivery under UCC § 2-305.
  2. A contract exists, but only for the sale of coffee at the roaster's list price.
  3. No contract exists because the common law of contracts, which requires the price to be definite, governs this agreement.
  4. No contract exists because the parties' express language made agreement on the price a condition precedent to being bound. (correct answer)
Explanation: This question tests your understanding of contract formation, specifically when parties explicitly make certain terms conditions precedent to being bound. When you see language that appears to make the contract conditional on future agreement, you need to carefully analyze whether the parties intended to be bound immediately or only after satisfying the stated conditions. The correct answer is D because the parties' written agreement explicitly states "if we do not [agree on price and delivery date], this agreement is null and void." This express language makes reaching agreement on price a condition precedent to contract formation. The parties clearly indicated they would not be bound unless they could agree on these essential terms. Since they failed to agree on price, no contract was formed according to their own stated intentions. Answer A is wrong because while UCC § 2-305 can supply a reasonable price when parties intend to contract but leave price open, it doesn't apply when parties expressly condition their agreement on reaching consensus about price. Answer B incorrectly assumes a contract exists and imposes the roaster's list price, but again, the parties made clear no contract would exist without their mutual agreement on price. Answer C reaches the right conclusion (no contract) but for the wrong reason - this sale of goods would be governed by the UCC, not common law, and the UCC generally doesn't require definite pricing. Remember: When parties use explicit conditional language like "null and void if we don't agree," respect their stated intentions. Don't let gap-filling provisions override clear conditional language that prevents contract formation.

Question 10

A wholesaler and a retailer signed a written agreement for the sale of 1,000 toys. The agreement stated the price would be 'the price listed in the manufacturer's January 1st catalog.' On January 1st, the manufacturer, having gone out of business, did not publish a catalog. The retailer demands the toys at last year's catalog price. The wholesaler argues that the contract is void.

  1. The contract is void because the external price standard failed.
  2. The contract is enforceable at a reasonable price at the time of delivery. (correct answer)
  3. The contract is enforceable at the price from the manufacturer's most recent prior catalog.
  4. The contract is enforceable only if the wholesaler sets a new price in good faith.
Explanation: The correct answer is B. UCC § 2-305(1)(c) directly addresses this situation. It provides that the parties can conclude a contract for sale even if the price is not settled, and states that if the price is to be fixed in terms of some agreed market or other standard as set or recorded by a third person or agency and it is not so set or recorded, the price is a reasonable price at the time for delivery. Here, the external standard (the catalog) failed. The UCC's gap-filler for price then applies. A is incorrect because the UCC provides a remedy when the price standard fails. C is incorrect because the contract specified the January 1st catalog, and using a prior catalog is not the default rule. D is incorrect because neither party has the unilateral right to set the price; the default is a reasonable price.

Question 11

You are advising a client, a bookstore, that made an oral agreement with a publisher to purchase 200 copies of a bestselling novel for $3,000. The parties did not discuss delivery arrangements. The publisher's warehouse is in New Jersey, and the bookstore is in New York. The bookstore expected the publisher to deliver the books, as is common in the industry. The publisher argues the books are available for pickup at its warehouse and refuses to ship them. Your client wants to know its rights.

  1. The publisher must deliver the books to the bookstore, because trade usage is part of the agreement and can supplement its terms. (correct answer)
  2. The bookstore must pick up the books from the publisher's warehouse, because this is the UCC's default rule.
  3. The oral contract is unenforceable under the Statute of Frauds, so the delivery issue is moot.
  4. The parties must share the cost of shipping because the contract is silent on the issue.
Explanation: The correct answer is A. While UCC § 2-308's default rule is delivery at the seller's place of business, this rule applies only if 'otherwise agreed.' Under UCC § 1-303, a usage of trade can be part of the agreement. The facts state that it is 'common in the industry' for publishers to deliver. This trade usage would supplement the written terms and override the UCC gap-filler. Therefore, the publisher is obligated to deliver. B is incorrect because it applies the gap-filler without considering that trade usage can constitute an agreement to the contrary. C is incorrect because the oral contract for goods over $500 is enforceable under the Statute of Frauds up to the quantity of goods for which payment has been made and accepted or which have been received and accepted. More importantly, the question asks about the delivery term, assuming a valid contract. D is incorrect as there is no UCC rule for sharing shipping costs.

Question 12

A supplier and a bakery have a longstanding relationship. They entered into a new contract for the sale of 1,000 pounds of flour per month. The written contract specified quantity but was silent on price and payment terms. For the first three months, the supplier sent an invoice with each delivery at the prevailing market price, and the bakery paid each invoice within 15 days. In the fourth month, the market price of flour rose 20%. The supplier delivered and invoiced at the new, higher market price. The bakery refused to pay, arguing they never agreed to a fluctuating price.

  1. The bakery is only obligated to pay the price charged in the first three months, as this established the contract price.
  2. The bakery must pay the new, higher market price, as the parties' course of performance established a variable pricing term. (correct answer)
  3. The contract is unenforceable for lack of a definite price term after the price increase.
  4. The UCC's gap-filler applies, and the price is a reasonable price at the time of delivery, which is the current market price.
Explanation: The correct answer is B. This question tests the hierarchy of terms under the UCC. While the UCC gap-filler for price (§ 2-305) is a 'reasonable price,' the parties' own conduct is more important. Under UCC § 1-303, a 'course of performance' exists when a contract involves repeated occasions for performance and the other party, with knowledge and opportunity to object, accepts the performance without objection. Here, for three months, the bakery accepted deliveries and paid invoices based on the prevailing market price. This course of performance establishes that the agreement was for a variable, market-based price. Therefore, the bakery must pay the higher price in the fourth month. A is incorrect because the course of performance established a method (market price), not a fixed price. C is incorrect because the contract is enforceable. D is close, but B is better because the course of performance is the primary interpretive tool, even though it leads to the same result as the gap-filler in this case. The reasoning based on course of performance is more precise.

Question 13

A supplier and a bakery have a longstanding relationship. They entered into a new contract for the sale of 1,000 pounds of flour per month. The written contract specified quantity but was silent on price and payment terms. For the first three months, the supplier sent an invoice with each delivery at the prevailing market price, and the bakery paid each invoice within 15 days. In the fourth month, the market price of flour rose 20%. The supplier delivered and invoiced at the new, higher market price. The bakery refused to pay, arguing they never agreed to a fluctuating price.

  1. The bakery is only obligated to pay the price charged in the first three months, as this established the contract price.
  2. The bakery must pay the new, higher market price, as the parties' course of performance established a variable pricing term. (correct answer)
  3. The contract is unenforceable for lack of a definite price term after the price increase.
  4. The UCC's gap-filler applies, and the price is a reasonable price at the time of delivery, which is the current market price.
Explanation: The correct answer is B. This question tests the hierarchy of terms under the UCC. While the UCC gap-filler for price (§ 2-305) is a 'reasonable price,' the parties' own conduct is more important. Under UCC § 1-303, a 'course of performance' exists when a contract involves repeated occasions for performance and the other party, with knowledge and opportunity to object, accepts the performance without objection. Here, for three months, the bakery accepted deliveries and paid invoices based on the prevailing market price. This course of performance establishes that the agreement was for a variable, market-based price. Therefore, the bakery must pay the higher price in the fourth month. A is incorrect because the course of performance established a method (market price), not a fixed price. C is incorrect because the contract is enforceable. D is close, but B is better because the course of performance is the primary interpretive tool, even though it leads to the same result as the gap-filler in this case. The reasoning based on course of performance is more precise.

Question 14

A buyer and a seller orally agreed over the phone for the sale of 50 custom-printed signs for $1,000. During the call, they agreed on the design, quantity, and total price, but did not discuss when payment was due. The seller delivered the signs to the buyer's shop. The buyer accepted the signs but refused to pay, claiming the contract is invalid because they never agreed on payment terms.

  1. The contract is valid, and payment was due when the buyer received the signs. (correct answer)
  2. The contract is unenforceable because the payment term, an essential element, was not agreed upon.
  3. The contract is invalid under the Statute of Frauds because it was an oral agreement for goods over $500.
  4. The contract is valid, and payment is due within 30 days of delivery, according to standard commercial practice.
Explanation: This question tests your understanding of contract formation, particularly how courts handle missing terms and the Statute of Frauds for goods contracts. When parties form a contract but leave certain terms unspecified, the law doesn't automatically void the agreement. Instead, courts will supply reasonable terms to make the contract workable, especially when the essential elements (offer, acceptance, consideration) are present. Here, the parties agreed on the core terms: specific goods (50 custom signs), quantity, and price ($1,000). The absence of payment timing doesn't invalidate the contract. Under the UCC, which governs sales of goods, when payment terms aren't specified, payment is due at the time and place where the buyer receives the goods. Since the buyer accepted delivery, payment became due immediately upon receipt. Why the wrong answers miss the mark: Answer B incorrectly assumes that every contract term must be explicitly negotiated - the law fills gaps with reasonable terms rather than voiding contracts. Answer C misapplies the Statute of Frauds; while contracts for goods over $500 generally require writing, there's an exception when goods are specially manufactured for the buyer and not suitable for sale to others in the ordinary course of business, which applies to custom-printed signs. Answer D incorrectly imposes a 30-day payment period that has no basis in law when goods are received. Remember: The UCC favors contract enforcement and provides default terms when parties leave gaps. Focus on whether the essential elements exist rather than whether every detail was negotiated.

Question 15

A machine shop and a factory entered into a written agreement providing that the machine shop would produce a 'substantial quantity' of custom gears for the factory over the next year. The agreement set forth detailed specifications for the gears but left the price, delivery schedule, and exact quantity open. After signing, the factory sent a purchase order for 1,000 gears at $50 per gear, a price consistent with the prior year's dealings. The machine shop refused the order, claiming no contract existed.

  1. A valid contract exists because the UCC can fill the gaps for price and delivery schedule.
  2. A valid contract exists because the factory's purchase order clarified the ambiguous terms.
  3. No valid contract exists unless the machine shop's refusal to perform was in bad faith.
  4. No valid contract exists because the quantity term is fatally indefinite. (correct answer)
Explanation: When you encounter contract formation questions, focus on whether all essential terms are sufficiently definite to create an enforceable agreement. Under contract law, certain terms must be clear enough that a court could determine if a breach occurred and fashion appropriate remedies. The correct answer is D because quantity is a fundamental term that cannot be left indefinitely vague. While "substantial quantity" might seem like it provides some guidance, it's far too ambiguous to create legal obligations. What constitutes "substantial" could vary wildly depending on perspective—the factory might consider 10,000 gears substantial while the machine shop might think 500 is substantial. Courts cannot enforce contracts when they cannot determine what performance is actually required. Choice A is incorrect because while the UCC can fill gaps for price (using reasonable market price) and delivery terms (within a reasonable time), it cannot cure a fatally indefinite quantity term. The UCC's gap-filling provisions only work when there's an underlying enforceable contract. Choice B fails because the factory's purchase order cannot unilaterally transform a fatally defective agreement into a valid contract. Since no valid contract existed initially due to the indefinite quantity, the purchase order merely constitutes an offer, which the machine shop rejected. Choice C misapplies the concept of bad faith, which only applies to parties already bound by a valid contract. Since no contract exists here, the machine shop has no duty to perform, making their good or bad faith irrelevant. Remember: indefinite quantity terms are typically fatal to contract formation unless they can be objectively determined through external standards or past dealings.

Question 16

A winery sent a signed written offer to a restaurant, stating, 'We offer to sell you 100 cases of our 2023 Chardonnay at a price to be mutually agreed upon in good faith next month. This offer is firm for 30 days.' The restaurant owner immediately signed and returned the offer. One week later, before any discussion on price, the winery received a much higher offer from a distributor and notified the restaurant that it was revoking its offer. The restaurant claims a valid contract was formed.

  1. A valid contract was formed because the offer was a firm offer and could not be revoked.
  2. A valid contract was formed, and a court will enforce it at a reasonable price at the time of delivery. (correct answer)
  3. No valid contract was formed because the price term, an essential element, was not agreed upon.
  4. No valid contract was formed because the parties' agreement to agree on a price shows they did not intend to be bound until the price was set.
Explanation: The correct answer is B. Under UCC § 2-204, a contract for the sale of goods may be made in any manner sufficient to show agreement. Under UCC § 2-305, a contract for sale can be concluded even if the price is not settled, provided the parties intended to form a contract. In such a case, the price is a reasonable price at the time for delivery. Here, the parties exchanged signed writings for a specific quantity of goods, indicating an intent to be bound. The failure to agree on a price does not invalidate the contract; the UCC gap-filler for price applies. A is incorrect because while the offer was a firm offer, the key issue is whether an acceptance of an offer with an open price term creates a contract, not just whether the offer was irrevocable. C is incorrect because under the UCC, price is not an essential term that must be agreed upon for a contract to be formed, unlike under the common law. D is incorrect because an agreement to agree on a price in good faith does not, by itself, defeat the overall intent to be bound when other terms (like quantity) are definite. The UCC presumes enforceability in such cases.

Question 17

A grocer contracted with a farmer to purchase 100 bushels of apples. The contract was silent on price and the type of apples. The farmer delivered 100 bushels of Granny Smith apples, which was the only type of apple the farmer grew. The farmer billed the grocer at the current market price for Granny Smith apples. The grocer rejected the shipment, claiming he wanted Red Delicious apples and that the contract was void for indefiniteness.

  1. The contract is void because the type of apples, an essential term, was not specified.
  2. The contract is valid, and the farmer's choice of apples is permissible if made in good faith.
  3. The contract is void because both the price and the specific nature of the goods were omitted.
  4. The contract is valid, but the grocer had the right to specify the assortment of goods. (correct answer)
Explanation: When you encounter contract formation questions involving missing terms, focus on whether the Uniform Commercial Code (UCC) can fill the gaps and who has the right to specify omitted details. Under UCC Article 2, contracts for the sale of goods don't fail for indefiniteness when reasonable gap-fillers exist. Here, the price gap is easily filled by current market price at delivery time. For the type of apples, the UCC provides that when a contract requires one party to specify assortments or other details, that party must make the specification. Since the grocer is the buyer purchasing apples for presumably retail purposes, the grocer had the duty to specify which type of apples he wanted. The contract is valid, but the grocer should have specified the apple variety, making answer D correct. Answer A is wrong because the UCC doesn't void contracts merely because the buyer failed to specify the type of goods when that's the buyer's responsibility. Answer B incorrectly places the choice with the farmer—while the farmer acted reasonably by delivering what he grew, the legal right to specify belonged to the grocer. Answer C overstates the indefiniteness problem since the UCC routinely fills price gaps with market price, and the goods specification issue doesn't void the contract but rather identifies who should have made the choice. Remember this pattern: when contracts omit specifications about assortment, quality, or similar details, look for which party should reasonably make that choice. The buyer typically specifies what they want, while the seller specifies how to deliver or perform.

Question 18

A farm equipment dealer and a farmer executed a detailed written agreement for the sale of a new tractor for $80,000. The agreement specified the model, features, and price, but did not state a date for delivery. Two weeks after the agreement was signed, the farmer called the dealer and demanded delivery within 48 hours, stating that any further delay would constitute a breach. The dealer responded that new tractors typically take four to six weeks to be prepared for delivery.

  1. The contract is void because it lacks a specific delivery date.
  2. The dealer must deliver the tractor within the 48 hours demanded by the farmer.
  3. The dealer must deliver the tractor within a reasonable time. (correct answer)
  4. The dealer can set any delivery date, as long as it acts in good faith.
Explanation: The correct answer is C. Under UCC § 2-309(1), if the time for shipment or delivery is not specified in a contract for the sale of goods, the time shall be a reasonable time. What constitutes a 'reasonable time' depends on the nature, purpose, and circumstances of the transaction, such as trade usage or prior course of dealing. Here, the dealer's statement that delivery typically takes four to six weeks is evidence of what is reasonable in this context. A is incorrect because the UCC provides a gap-filler for the time of performance. B is incorrect because the farmer cannot unilaterally impose an unreasonably short deadline; the standard is a reasonable time, not the buyer's demand. D is incorrect because while the dealer must act in good faith, the objective standard of 'reasonable time' governs, not the dealer's subjective preference.

Question 19

A wholesaler and a retailer signed a written agreement for the sale of 1,000 toys. The agreement stated the price would be 'the price listed in the manufacturer's January 1st catalog.' On January 1st, the manufacturer, having gone out of business, did not publish a catalog. The retailer demands the toys at last year's catalog price. The wholesaler argues that the contract is void.

  1. The contract is void because the external price standard failed.
  2. The contract is enforceable at a reasonable price at the time of delivery. (correct answer)
  3. The contract is enforceable at the price from the manufacturer's most recent prior catalog.
  4. The contract is enforceable only if the wholesaler sets a new price in good faith.
Explanation: The correct answer is B. UCC § 2-305(1)(c) directly addresses this situation. It provides that the parties can conclude a contract for sale even if the price is not settled, and states that if the price is to be fixed in terms of some agreed market or other standard as set or recorded by a third person or agency and it is not so set or recorded, the price is a reasonable price at the time for delivery. Here, the external standard (the catalog) failed. The UCC's gap-filler for price then applies. A is incorrect because the UCC provides a remedy when the price standard fails. C is incorrect because the contract specified the January 1st catalog, and using a prior catalog is not the default rule. D is incorrect because neither party has the unilateral right to set the price; the default is a reasonable price.

Question 20

A chemical company agreed to sell a specialty solvent to a paint manufacturer. The written contract specified the quantity of 1,000 gallons and the price, but provided that the delivery date would be 'at the seller's convenience.' Two months passed, and the paint manufacturer, running low on the solvent, demanded delivery. The chemical company stated it was experiencing production issues and could not say when it would deliver.

  1. The term 'at the seller's convenience' makes the delivery obligation illusory and the contract unenforceable.
  2. The seller must deliver the solvent within a reasonable time, notwithstanding the 'at the seller's convenience' clause. (correct answer)
  3. The seller may delay delivery indefinitely as long as it eventually intends to perform.
  4. The buyer can sue for immediate delivery because the seller's failure to set a date is a breach of contract.
Explanation: The correct answer is B. Even with a term like 'at the seller's convenience,' the UCC imposes an obligation of good faith (UCC § 1-304) and commercial reasonableness. A term leaving performance to one party's discretion does not mean they can fail to perform. Courts will interpret such a clause to mean that delivery must still occur within a reasonable time, informed by good faith. The seller cannot use this clause to delay indefinitely or fail to deliver at all. An unreasonable delay would constitute a breach. A is incorrect because the duty of good faith prevents the promise from being illusory. C is incorrect because the seller's discretion is limited by reasonableness. D is premature; the buyer's remedy is to demand adequate assurance of performance or, after a reasonable time has passed, treat the delay as a breach, but the seller's failure to set a date is not yet an automatic breach without more context on what constitutes a reasonable time.