The Emmett School (ESD) district contracts with the GoldenFarms Dairy for "all of the milk" GoldenFarms can produce during ESD's current school year. The contract specifies a price, but no exact quantity of milk to be purchased is set in the contract. This contract is a(n):
A) invalid contract because no quantity is set.
B) valid requirements contract.
C) valid output contract.
D) invalid contract because consideration is missing.

Question

Quizplus · Accepted Answer

Sometimes, a seller will agree to sell "all the goods we manufacture" or "all the crops we produce" to a particular buyer, with a set price, but open quantity. This agreement is known as an output contract.

The Emmett School (ESD) District Contracts with the GoldenFarms Dairy