Acme Bowling Equipment Co. provides bowling alley return equipment of bowling alleys and lanes across the country. In its contract with Fred's Bowling Alley, a contract predominantly for the sale of the equipment and incidentally for its installation and trouble-shooting services, Acme states it will sell and completely set up the bowling equipment for the price stated. In the process if installing the equipment, Acme discovers Fred's Bowling Alley premises is not sitting on level ground, a condition Acme could have investigated and discovered but did not, and an issue Acme could have addressed in its contract but likewise did not. The result is that Fred's unleveled premises will require a great deal more cost to Acme. Acme approaches Fred with the problem: "Fred, you've got to cut us a break here - we had no idea your alley was so out-of-level - we've just got to have extra money to complete everything."

Fred refuses and demands that Acme complete its contract, but Acme stops work, demanding Fred agree to the extra payment before it will complete the job. Fred finally agrees to pay more, but when the invoice comes, Fred pays the original price but refuses to pay the extra amount. Acme sues for the extra. Who loses?

1. Fred because a mutual mistake was made
2. Fred because contract modifications under the U.C.C. need no consideration
3. Acme because it refuses to complete the job
4. Acme because its demand for extra money is unsupported by consideration