Betty's BBQ Orally Contracts with Denny's Design House for 10,000

question 42

Multiple Choice

Betty's BBQ orally contracts with Denny's Design House for 10,000 matchbooks at the price of 10 cents per matchbook.The matchbooks are to be embossed with a logo to be designed by Denny's Design promoting Betty's BBQ.Price,payment terms,delivery terms are agreed upon between the parties.Denny's Design creates the logo,gets Betty's BBQ's approval of the design and begins applying the logo on the matchbook covers.Denny's Design has almost finished the order when Betty's BBQ calls to say it has decided to make the eatery a smoke-free restaurant and cancels the order.Denny's Design sues,but Betty's BBQ states that the agreement is unenforceable under the statute of frauds.Who wins?

• A)Denny's Design House wins.This situation falls under an exception to the statute of frauds.
• B)Denny's Design House wins. This is a service contract for design of a logo. Therefore, the UCC, including the statute of frauds provisions of Article 2, does not apply.
• C)Betty's BBQ wins. This is a contract for $1000. The statute of frauds requires all sales contracts in excess of $500 be in writing.
• D)Betty's BBQ wins. The statute of frauds only applies to merchants. Betty's BBQ is not a merchant in this instance because it intended to give the matchbooks away and not sell them.

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Definitions:

Risk Neutral

A risk neutral person or entity is indifferent between choices with different levels of risk, focusing solely on the expected outcome without concern for the variability of returns.

Risk Averse

Personality or preference indicating a tendency to avoid taking risks, preferring certainty or less risky options.

Income

The money received, especially on a regular basis, for work, through investments, or from benefits.

Utility Function

A mathematical representation that ranks an individual's preferences for various combinations of goods and services based on the level of satisfaction (utility) they provide.