Question

Al Martin, a wholesale distributor, made a contract for the purchase of 10,000 gallons of gasoline from the Wilberforce Oil Company. The price was to be determined in accordance with the refinery price as of the close of business on the delivery date. Credit terms were net/30 after delivery. Under these circumstances, which of the following statements is true?

A. Although the price has some degree of uncertainty, the contract is enforceable.
B. The contract being silent on the place of delivery, Martin has the right to expect delivery at his place of business.
C. If Martin pays upon delivery, he is entitled to a 2% discount.
D. Because the goods involved are tangible, specific performance is a remedy available to Martin.

Answer 1

The contract is enforceable despite the uncertainty in the price of the gasoline.

Step-by-step explanation:

The correct answer is A. Although the price has some degree of uncertainty, the contract is enforceable.

In this scenario, Al Martin, a wholesale distributor, made a contract with the Wilberforce Oil Company to purchase 10,000 gallons of gasoline. The price of the gasoline was to be determined based on the refinery price at the close of business on the delivery date. This means that the price had some degree of uncertainty as it would depend on the market price at that specific time.

However, despite the uncertainty in the price, the contract is enforceable because it contains essential terms such as quantity, subject matter, and intentions to create a legal relationship. The fact that the contract includes credit terms of net/30 after delivery further supports its enforceability.