Deck 8: Sales, Licensing, and E-Commerce.

Question 1

The UCC treats fixtures as goods.

Answer 1

False

Question 2

Many states have applied Article 2 of the UCC to software licenses either directly or by analogy.

Answer 2

True

Question 3

Under the UCC,the implied warranty of merchantability guarantees that the goods are reasonably fit for the general purposes for which they are sold,and that they are properly packaged and labeled.

Answer 3

True

Question 4

Under the UCC doctrine of commercial impracticability as applied by the UCC,a failure to perform is a breach even if performance is made impractical by an event unforeseen by the contract.

Question 5

Most courts require that a plaintiff prove reliance on an express warranty in order to recover damages.

Question 6

The Uniform Computer Information Transactions Act is a federal law.

Question 7

The main issue in CASE 8.1 Option Wireless,Ltd.v.OpenPeak,Inc.(2012)involved the so-called "knockout rule."

Question 8

A proposal by a sales representative that is subject to approval by the home office is not an offer.

Question 9

Efforts to create a comprehensive uniform state law for software licensing have been largely unsuccessful.

Question 10

Procedural unconscionability is easier to prove in a commercial setting than when an individual consumer is involved.

Question 11

The UCC requires an obligation of good faith in the performance of every contract or duty covered by the act.

Question 12

The UCC applies identical rules concerning the sales of goods to merchants and nonmerchants.

Question 13

Most states have adopted the Uniform Electronic Transactions Act.

Question 14

The implied warranty of fitness for a particular purpose may apply to merchants and nonmerchants alike.

Question 15

As defined by the UCC,"good faith" involves the observance of objective reasonable commercial standards of fair dealing but there is no requirement as to honesty in fact.

Question 16

A contract for the sale of land is governed by Article 2 of the UCC.

Question 17

The UCC does not specifically define an offer or an acceptance.

Question 18

The UCC has adopted the "mirror image" rule.

Question 19

Under the UCC,the buyer may reject any or all of the goods if the goods fail to conform to the contract.

Question 20

The UCC permits a contract to be enforced if the parties intended a binding contract,even though important terms may have been left open for later agreement.

Question 21

According to the UCC,if no amount of time is specifically stated,a firm offer provided by a merchant must be kept open for a reasonable period of time,up to:

A) one year.
B) six months.
C) three months.
D) sixty days.

Question 22

A product liability action brought in tort generally permits recovery of economic damages suffered by a purchaser of an inferior or defective product whereas a breach of warranty action would not allow such a claim.

Question 23

If parties to a contract dispute a missing term,the court could simply fill-in the missing term using the __________ provisions of the UCC.

A) Gap-Filler
B) Conditional Acceptance
C) Battle of the Forms
D) Knockout Rule

Question 24

A contract is __________ when one party is induced to enter a contract without having any meaningful choice.

A) substantively unconscionable
B) procedurally unconscionable
C) procedurally impracticable
D) substantively impracticable

Question 25

Under the UCC,a firm offer only applies to:

A) merchants.
B) merchants and non-merchants.
C) non-merchants.
D) option contracts.

Question 26

Under Section 2-207(2),if only one party is a merchant,an acceptance containing additional terms:

A) automatically becomes part of the contract unless the offeror objects within ten days.
B) is considered a proposal for additions to the contract.
C) is a counteroffer.
D) has no effect and the contract is accepted without the new terms.

Question 27

If a sales contract requires or authorizes the seller to ship goods by carrier,when does the risk of loss pass to the buyer if the contract does not require delivery at a particular destination?

A) At the time the goods are properly delivered to the carrier.
B) At the time the carrier tenders the goods to the buyer.
C) At the time the contract is initially entered into.
D) Not until the buyer has received the goods and had a chance to inspect them.

Question 28

Under the Convention on Contracts for the International Sale of Goods (CISG),an offer becomes effective when:

A) the offeror sends it.
B) it reaches the offeree.
C) the offeree reads it.
D) the offeree replies.

Question 29

If a sales contract requires the seller to ship the goods by carrier and specifies the destination,the risk of loss passes to the buyer when the:

A) goods are properly delivered to the carrier.
B) carrier tenders the goods to the buyer at the specified destination.
C) contract is finalized.
D) seller pays for the goods.

Question 30

A contract is __________ if its terms are unduly harsh or oppressive or unreasonably favorable to one side.

A) substantively unconscionable
B) procedurally unconscionable
C) procedurally impracticable
D) substantively impracticable

Question 31

Which of the following is governed by Article 2 of the UCC?

A) A contract for sale of a commercial building
B) A contract for sale of office supplies
C) An employment contract
D) A life insurance contract

Question 32

To which of the following does the term "battle of the forms" refer?

A) The situation in which one of the parties wishes to use a preprinted form, but the other party wishes to engage in direct negotiation.
B) The situation in which the parties entered into a formal contract, but the contract has been misplaced by both parties resulting in uncertainty regarding the exact terms of the original contract.
C) The situation in which parties have neglected to bargain over items and then exchange standard printed forms resulting in confusion regarding the terms of the contract.
D) The situation in which a party wishes to claim unconscionability based upon another party's use of a preprinted form.

Question 33

__________ are items of personal property attached to real property that cannot be removed without substantial damage.

A) Connectors
B) Relaters
C) Entanglements
D) Fixtures

Question 34

Which of the following is an example a statement made by a salesperson that would be considered "puffing"?

A) This car will get 35 miles per gallon.
B) This is a genuine diamond ring.
C) This is an original work of art.
D) This copier is the best in the business.

Question 35

To which of the following does Article 2 of the UCC apply?

A) The sale of goods.
B) The rendering of services.
C) The sale of land.
D) Both the sale of goods and the rendering of services.

Question 36

Under the UCC,the __________ term(s)must be in a writing order to satisfy the statute of frauds.

A) price
B) quantity
C) identity of the parties
D) time and place for delivery

Question 37

Which of the following is true regarding the UCC's Statute of Frauds?

A) The writing involved must be typed, not handwritten.
B) The writing must be signed by the party to be charged, not necessarily by all parties
C) Any warranties must be included in the writing in order to be enforceable
D) The UCC's requirements regarding a writing are strict and place significant burdens on the parties in regard to adequately including all terms of the agreement in the writing.

Question 38

Which of the following is the majority approach when resolvingcontradictory terms in pre-printed forms? (See theRichardson v.Union Carbide Industrial Gases,Inc.case)

A) The majority approach is that the offeror's terms control.
B) The majority approach isthat the offeree's terms control.
C) The majority approach is to applythe knockout rule with conflicting terms knocked out of the contract.
D) The majority approach is the assimilation view whereby terms of the offer prevail over the different terms in the acceptance only if the latter are materially different.

Question 39

When the seller provides the buyer with a document enabling them to pick up goods held at an independent warehouse,the risk of loss passes to the buyer when the:

A) goods are picked up by the buyer.
B) contract of sale is signed.
C) buyer receives the document entitling it to pick up the goods.
D) buyer pays for the goods.

Question 40

UCC Section 2-319 expressly authorizes the buyer and seller to allocate the __________ between them as they see fit.

A) damages
B) specific performance
C) modification
D) risk of loss

Question 41

In CASE 8.2 MacNeil Automotive Products,Ltd.v.Cannon Automotive,Ltd.(2010),MacNeil subcontracted with Canon Automotive to provide floor mats on automobiles.MacNeil claimed the mats were defective and breached the express warranty.The main question before the court was whether:

A) the sales talk constituted an implied warranty for fitness of purpose.
B) the sales talk constituted an implied warranty of merchantability.
C) the sales talk was puffery or an express warranty.
D) the sales talk properly disclaimed all express warranties.

Question 42

Which of the following is an online agreement that appears on a website but does not require the user to take any action to express his or her consent to the agreement?

A) Click-wrap license
B) Browse-wrap agreement
C) Shrink-wrap license
D) Computer-license agreement

Question 43

Polly sold Jason a used car for $1,000.Their contract provided that the engine in the car was in good shape,a true statement as far as Polly knew.Unfortunately,the day after Jason purchased the car,it broke down and was discovered to have significant engine problems.Jason told Polly that he wanted a refund.Polly told him that he was not entitled to a refund because she did not lie and that as far as she knew,there was nothing wrong with the car.Which of the following is true?

A) Jason is entitled to a refund because of a breach of an express warranty.
B) Jason is entitled to a refund because of a breach of the implied warranty of fitness for a particular purpose.
C) Jason is entitled to a refund only if he can obtain evidence that Polly lied.
D) Jason is not entitled to a refund under any circumstances because the vehicle was used.

Question 44

In a state that had adopted the Uniform Electronic Transactions Act,Kiera and Ben entered into a contract whereby Ben would clean Kiera's house once a week for eighteen months for $75 per week.The transaction was done electronically,and both Kiera and Ben signed through the use of an electronic signature.Unfortunately,problems resulted when Ben failed to show up as scheduled.Ben told Kiera that the contract was not good because his signature was made electronically.Kiera told him that he was wrong and that he needs to get up to date with the modern age.Which of the following is correct regarding the dispute?

A) Ben is correct because electronic signatures are not recognized as valid under any circumstances.
B) Ben is correct only if Kiera's name was typed as opposed to being shown in handwriting-style (cursive) form.
C) Kiera is correct that the signature is sufficient only if she can show that she and Ben had previously engaged in electronic transactions.
D) Kiera is correct that her electronic signature is sufficient.

Question 45

Ricardo develops a new type of software and asks you how he should go about making money through distribution of it.He has been told that he should sell the software as opposed to issuing licenses for its use.What should you tell him?

A) That by selling, rather than by licensing, a software vendor can avoid the doctrine of first sale, which allows a lawful owner to sell or otherwise dispose of the copy.
B) That by licensing, rather than by selling, a software vendor can avoid the doctrine of first sale, which allows a lawful owner to sell or otherwise dispose of the copy.
C) That selling is the only reasonable alternative because computer programs are not copyrightable.
D) That licensing is the only reasonable alternative because computer programs are not copyrightable.

Question 46

Which of the following will NOT create an express warranty under the UCC?

A) Making a statement or promise relating to the goods.
B) Expressing an opinion about the quality of the goods.
C) Providing a description of the goods.
D) Stating any fact regarding the quality of the goods.

Question 47

Renee owns a small restaurant that sells hamburgers as one of its main attractions.She puts up a sign that says "Best Burgers in the County".Peter does an exhaustive investigation of all restaurants in the county and asks his friends to do the same.They all determine that actually a restaurant run by their friend Sam has the best burgers in the county.Peter tells Renee that unless she takes down her sign,he is going to sue her for breach of warranty and false advertising.Renee tells him that he has no cause of action.Who is correct?

A) Peter is correct so long as he and his friends can convince the jurors in a lawsuit that Sam has the best burgers.
B) Peter is correct only if he can establish that Renee was aware that Sam's burgers actually taste better before she put up the sign.
C) Peter is incorrect because Renee was engaged in "spoofing".
D) Peter is incorrect because Renee was engaged in "puffing".

Question 48

Indicate how a seller may disclaim warranties under the UCC.

Question 49

Chris sold Valerie a home containing a wood stove which could not be removed from the home without causing substantial damage.Shortly after the sale,Valerie sustained significant smoke damage due to a malfunction of the stove.She told Chris that she was going to sue him under the UCC.Chris told her that was not possible.Which of the following is true?

A) Chris is correct because the stove would likely be a fixture not covered by the UCC.
B) Valerie is correct because the stove would likely be a fixture covered by the UCC.
C) Valerie is correct because the stove would not be considered a fixture and would, therefore, be covered by the UCC.
D) Valerie is correct because the sale of the home would be covered under the UCC along with anything else sold with the home.

Question 50

A(n)__________ contract occurs when one party is induced to enter a contract on a "take it or leave it" basis.

A) adhesion
B) merchants
C) output
D) requirement

Question 51

Which of the following is the essential consideration under the UETA for determining the validity of an electronic signature?

A) Whether the person intended the process or mark provided to act as a signature and whether it can be attributed to that person.
B) Whether an actual signature, as opposed to some sort of unacceptable click-type agreement is involved.
C) Whether an actual written type signature appears as opposed to an unacceptable typed name.
D) Whether an actual written or typed signature appears as opposed to some sort of facsimile.

Question 52

Why do vendors today typically prefer to license software rather than sell it outright?

Question 53

A(n)__________ places the license terms on the outside of a box containing software.

A) click-wrap license
B) browse-wrap agreement
C) shrink-wrap license
D) computer-license agreement

Question 54

Under 2-711 of the UCC,a buyer has a remedy called "cover".What is cover and when can it be used?

A) Cover applies when conforming goods are rejected by the buyer, giving him the right to cancel the contract and buy better goods elsewhere with reimbursement for any extra costs.
B) Cover applies when nonconforming goods are delivered to the buyer, giving him the right to cancel the contract and buy the goods elsewhere with reimbursement for any extra costs.
C) Cover is a SELLER's right and does not apply to the buyer.
D) Cover allows a buyer to cancel the contract after the shipment is delayed for 30 days, and recover direct damages from the seller.

Question 55

Which of the following is NOT a type of warranty under the UCC?

A) Express
B) Fitness for a particular purpose
C) Merchantability
D) Specific performance

Question 56

The courts that have considered click-wrap licenses have generally found that the licenses are:

A) enforceable.
B) enforceable only for software costing $100 or less.
C) enforceable only for software costing $100 or less and that is designed for business, not consumer use.
D) unenforceable.

Question 57

__________ do not relieve a contracting party from their responsibilities under the UCC doctrine of commercial impracticability.

A) Wars
B) Market fluctuations
C) Embargoes
D) Market fluctuations and embargoes

Question 58

Which of the following is true regarding the UETA in relation to the E-SIGN Act?

A) Because the UETA is a federal law, whereas the E-Sign Act is a creature of state law, the UETA preempts the E-Sign Act in many ways.
B) The UETA and also the E-Sign Act exclude wills from their coverage.
C) Both the UETA and the E-Sign Act include within their broad scope provisions that divorces may be entered into and recorded electronically.
D) The UETA allows electronic signatures whereas the E-Sign Act disallows such signatures.

Question 59

Explain the different types of warranties that exist under the UCC.

Question 60

Between merchants,what is the affect of an acceptance that includes additional terms without expressly making the contract subject to the offeror's agreeing to those terms?

Question 61

If the contracted goods are unique and fail to be delivered,the buyer can ask a court under 2-716 of the UCC to order:

A) allocation of risk of loss.
B) consequential damages.
C) cover.
D) specific performance.

Question 62

What must be established in order for goods to be considered merchantable under the UCC?

Question 63

What does Section 201 of the UCC provide regarding a Statute of Frauds?

Question 64

What is the rule regarding the enforceability of a contract for the sale of goods that comes within the statute of frauds if no quantity is specified?