Roberto obtains an exclusive franchise to sell widgets for the Acme Widget Company.The exclusive franchise covers the entire State of Wisconsin for a period of three years.In this case:
A) the manufacturer is obligated to use his best efforts to supply the goods even if no such clause appears in the written franchise agreement.
B) Roberto has an implied obligation to use his best efforts to promote the sale of the widgets.
C) under the UCC, such an agreement lacks consideration.
D) Two of these but not all three.

Question

Quizplus · Accepted Answer

A and B are correct. Under common law principles related to exclusive dealing contracts, the manufacturer (Acme Widget Company) has an implied obligation to use its best efforts to supply the goods, even if this is not explicitly stated in the contract. Similarly, the grantee of the exclusive franchise (Roberto) has an implied obligation to use his best efforts to promote and sell the widgets. These obligations are implied to ensure that both parties benefit from the exclusive arrangement and to prevent one party from undermining the agreement's purpose. Choice C is incorrect because, under the Uniform Commercial Code (UCC), an exclusive dealing contract does provide consideration due to the mutual obligations and benefits it creates for both parties.

Roberto Obtains an Exclusive Franchise to Sell Widgets for the Acme