Under UCC, a buyer's failure to specify the quantities to be delivered is a breach only if it materially affects the seller's performance. True or false?

• A. True
• B. False
• C. Not applicable
• D. Cannot be determined from the facts.

Answer: (A)

Under UCC, missing a fixed quantity can still give a valid contract if the quantity is to be determined by actual output or actual requirements. That means the buyer doesn’t have to specify an exact number upfront; the contract can be interpreted as an output or a requirements contract, where the seller’s quantity obligation is tied to what is produced or what the buyer actually requires, measured in good faith and not unreasonably disproportionate to any estimate.

So, the buyer’s failure to fix a precise quantity does not automatically constitute a breach. A breach would occur only if, in applying the open-term arrangement, the seller cannot perform in good faith or the lack of a defined quantity would materially impair the seller’s ability to perform. In other words, the contract remains enforceable to the extent that quantity is determined by the buyer’s actual needs (requirements) or the seller’s actual output, and any breach hinges on whether the seller’s performance is impracticable or materially affected.

For example, in a requirements contract, the buyer will purchase what it reasonably needs; the seller is obligated to supply those needs in good faith. If the buyer’s needs are within a reasonable range and the seller responds in good faith, there’s no breach simply because the quantity wasn’t fixed at the outset.