Question

Assume Northern Company contracts with Speedy Manufacturing for the purchase of 200 custom manufactured lights to be delivered to Northern Company by August 1 of the current year. Northern Company promises to pay $5,000 for the 200 lights. Due to a shortage in materials nationwide, Speedy Manufacturing Company requests an extension for performance of October 1 of the current year. Northern agrees. Which of the following statements is true regarding this situation?

The promise to extend the due date for performance will not necessarily have to be supported by consideration under the UCC

The promise to extend performance is considered a release under the UCC

The promise to extend the due date of performance is considered an accord and satisfaction under the UCC

The promise to extend the due date for performance must be supported by consideration under the UCC

Answer 1

ANSWER:

True Statement- A. The Promise to extend the due date for Performance will not necessarily have to be supported by consideration under the UCC.

Explanation-

Under Article 2 of UCC that is Uniform Commercial Code which deals with contracts for the Sale of Goods. It allows Modification in Sale of Goods Contracts when NO CONSIDERATION at all is Provided by One Side. For Example Change in Due Date of Performance or Delivery Date.

In Given Case, Request from Speedy Manufacturing Company regarding Extension of Due date of Performance from August 1 to October 1 which is agreed by Northern Company Such Modification/Change in Sale Contract will be enforceable without any consideration as discussed above.

Statement B is False. As The Promise to extend Performance is NOT considered as Release under UCC.

Statement C is False. As The Promise to extend due date of Performance is NOT considered as Accord or Satisfaction under UCC.

Statement D is False. As for Modification/Change of Due Date of Performance Consideration is NOT required.

Thus, Based on above Points, Statement A is TRUE