Practice Quiz

CLEP Business Law

Category - Contracts

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Elizabeth designs greeting cards. Big Printer manufacturers the greeting cards for Elizabeth. Elizabeth entered into an agreement with Big Gift Shop to provide them with 1000 greeting cards for $2.00 per card. Big Printer unexpectedly raised its printing prices to the extent that Elizabeth would lose money if she sold her cards at $2.00 per card. Elizabeth told Big Gift Shop that she would not be able to fulfill her obligations under the contract. Big Gift Shop sued Elizabeth for breach. Who will win?
  1. Elizabeth will win because the price increase has made the contract unconscionable.
  2. Elizabeth will win because she can no longer afford to perform.
  3. Big Gift Shop will win because once parties enter in a contract for the sale of goods, the contract is inexcusable.
  4. Elizabeth will win because changed circumstances excused her from performing.
  5. Big Gift Shop will win because Elizabeth is not excused from performing just because performance has become expensive for her.
Explanation
Answer: E. Big Gift Shop will win because Elizabeth is not excused from performing just because performance has become expensive for her. While the contract now is burdensome to Elizabeth, that alone will not provide a legal reason that would excuse Elizabeth's breach. In addition, just because a contract is expensive for one party to perform does not make it unconscionable.
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