NINJA MCQ's 209 & 282
On June 1, 20X1, Decker orally guaranteed the payment of a $5,000 note Decker's cousin owed Baker. Decker's agreement with Baker provided that Decker's guaranty would terminate in 18 months. On June 3, 20X1, Baker wrote Decker confirming Decker's guaranty. Decker did not object to the confirmation. On August 23, 20X1, Decker's cousin defaulted on the note, and Baker demanded that Decker honor the guaranty. Decker refused. Which of the following statements is correct?
A. Decker is liable under the oral guaranty because Decker did not object to Baker's June 3 letter.
B. Decker is not liable under the oral guaranty because it expired more than one year after June 1.
C. Decker is liable under the oral guaranty because Baker demanded payment within one year of the date the guaranty was given.
Correct D. Decker is not liable under the oral guaranty because Decker's promise was not in writing.
You are correct, the answer is D.
Decker is not liable under the oral guaranty because Decker's promise was not in writing. Under the statute of frauds, any promise to assume the debts of another must be evidenced by a writing signed by the guarantor (Decker in this case) to be enforced by a court.
Webstar Corp. orally agreed to sell Northco, Inc., a computer for $20,000. Northco sent a signed purchase order to Webstar confirming the agreement. Webstar received the purchase order and did not respond. Webstar refused to deliver the computer to Northco, claiming that the purchase order did not satisfy the U.C.C. Statute of Frauds because it was not signed by Webstar. Northco sells computers to the general public and Webstar is a computer wholesaler. Under the U.C.C. Sales Article, Webstar's position is:
Correct A. incorrect because it failed to object to Northco's purchaser order.
B. incorrect because only the buyer in a sale-of-goods transaction must sign the contract.
C. correct because it was the party against whom enforcement of the contract is being sought.
D. correct because the purchase price of the computer exceeded $500.
You are correct, the answer is A.
The Uniform Commercial Code (U.C.C.) Sales Article generally requires that sales contracts in excess of $500 be evidenced by a written document. If both parties are merchants, a document confirming the existence of an oral agreement and signed by the party sending the document satisfies the writing requirement as to the recipient as well as to the sender if the recipient does not object to the writing within 10 days after receipt. Therefore, Webstar's position is incorrect because Webstar failed to object to Northco's purchase order.
Is this just something to memorize or is there some common sense thing I'm missing?
BEC - 79
REG - 85
AUD - 5/27/16
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