Question

Mid-American Oil had a contract with NSB Company to supply 1,000 gallons of oil by September 1. The contract contained a provision which required all modifications to be written and signed by the company presidents. In early August, an executive of Mid-American talked with the purchasing agent of NSB who orally agreed to two shipments of oil; one in September and the second one in December.
By September 30, when only 500 gallons had been delivered, NSB sued.
The likely outcome of this lawsuit is:

a) NSB wins because the modification was not supported by new consideration.
b) NSB wins because the modification has to be in writing.
c) Mid-American Oil wins because the UCC governs this case and no new consideration is required.
d) Mid-American Oil wins because new consideration was present.

Answer 1

Answer:

B) NSB wins because the modification has to be in writing.

Explanation:

If the contract specifically states that any modifications or addendums must be done in writing and must be signed by the companies' presidents, then any verbal agreement that modifies the contract is not enforceable. So the original contract is still in place and since Mid-American didn't perform, NSB can sue them and will win.

Contracts this large must be done in writing and signed under UCC rules, regardless of any specific clause.