Which statement about a requirements contract is correct?

• A. The contract is invalid if demand increases unreasonably
• B. It cannot be altered by the buyer
• C. The buyer can't surprise by requesting an amount out of line with prior demands
• D. It must be in writing to be valid

Answer: (C)

In a requirements contract, the buyer agrees to purchase all of its needs for a given good from the seller over a specified period, so the quantity isn’t fixed in advance and can rise or fall with actual needs. The key rule is good faith: the buyer must act in good faith and cannot surprise the seller by demanding a quantity that is wildly out of line with prior usage or reasonable fluctuations. That principle is why the statement about the buyer not being able to request an amount out of line with prior demands is correct—the contract contemplates changing needs, but not opportunistic or arbitrary spikes that violate good faith.

The other notions don’t fit as precisely. A demand spike isn’t automatically invalid; it’s evaluated for good faith and reasonableness. The buyer can’t be said to “alter” the contract in a void sense, since changes in the buyer’s needs are inherent to the arrangement, again subject to good faith. And while some contracts under the Uniform Commercial Code may require writing under certain circumstances, a requirements contract isn’t universally invalid unless there’s no writing under applicable Statute of Frauds rules; the absence of a writing requirement in itself doesn’t make the contract invalid.