Deck 23: Nature and Form of Sales

Question 1

Any modification of a sales contract must be supported by some form of consideration.

Answer 1

False

Question 2

The parol evidence rule does not apply to the sale of goods.

Answer 2

False

Question 3

A contract that has elements of both goods and services is always classified as a contract for the sale of goods.

Answer 3

False

Question 4

A merchant is about to transfer his entire inventory as part of an annual clearance action. This transfer is called a bulk transfer.

Question 5

An offer to buy or sell goods may be accepted in any manner that is reasonable under the circumstances.

Question 6

An output or requirement contract is not enforceable unless the parties include an estimate of prospective amounts.

Question 7

A contract of indefinite duration may be terminated by notice from either party to the other party.

Question 8

A firm offer is effective only if the merchant receives consideration to keep the offer open.

Question 9

A sale of goods is defined under UCC Article 2 as transfer of title to intangible property for a price.

Question 10

A contract for the sale of goods is not enforceable unless the contract clearly expresses the price.

Question 11

Goods physically existing and owned by a seller at the time of a transaction are called existing goods.

Question 12

The UCC permits a court to refuse to enforce a sales contract that it finds to be unconscionable.

Question 13

If a contract calls for both rendering services and supplying materials to be used in performing the services, the contract is classified according to its dominant element.

Question 14

A gift is a free transfer of the title to property.

Question 15

A bailment is a special form of sale in which possession is transferred to a bailee.

Question 16

The term "course of dealing" refers to the language and customs of an industry.

Question 17

UCC Article 2 applies not only to contracts for the sale of familiar items of personal property, such as automobiles or chairs, but also to the transfer of commodities, such as oil, gasoline, milk, and grain.

Question 18

Defenses raised in a suit based on a sales contract differ greatly from defenses used in regard to any other type of contract.

Question 19

Sales law includes special rules that apply to merchants.

Question 20

When a term of an acceptance conflicts with a term of an offer but it is clear that the parties intended to be bound by a contract, the UCC still recognizes the formation of a contract, and the conflicting terms cancel each other and are ignored.

Question 21

All goods other than those existing and owned by a seller at the time of a transaction are called:

A) existing goods.
B) tangible goods.
C) future goods.
D) intangible goods.

Question 22

If a contract for the sale of goods does not state the price to be paid, the:

A) contract is void because it is too indefinite to be enforced.
B) buyer is required to pay a reasonable price for the goods.
C) buyer can pay whatever price the buyer in good faith believes is a proper price.
D) seller can rightfully charge whatever price the seller in good faith believes is a proper price.

Question 23

Article 2 of the Uniform Commercial Code applies to the sale of:

A) corporate stocks.
B) U.S. Treasury bonds.
C) goods.
D) insurance policies.

Question 24

A writing that is offered to satisfy the statute of frauds must have been written for that purpose.

Question 25

With regard to transactions between merchants, failure to repudiate a confirming letter within ten (10) days after receipt binds the non-signing merchant, just as if he had signed the letter or a contract.

Question 26

Consumer protection statutes may require a writing that is more detailed than the writing required by the statute of frauds provision of the Uniform Commercial Code.

Question 27

The provisions of Article 6 concerning bulk transfers are designed to protect creditors.

Question 28

The CISG governs all contracts between parties in the countries that have ratified it.

Question 29

Which of the following is not a sale of goods?

A) a bailment
B) an option to purchase
C) a gift
D) all of the above

Question 30

Under Article 2 of the UCC, in a situation where it is clear that the parties intended a contract, but a term in the acceptance conflicts with a term in the offer:

A) there is no contract.
B) the acceptance is viewed entirely as a counteroffer.
C) there is a contract for the terms of the offer and acceptance that are consistent, but the conflicting terms cancel out.
D) there is a contract, and the conflicting term in the offer is part of the contract.

Question 31

An oral contract to sell custom-made goods to a buyer is binding if the goods are not suitable for sale to anyone else in the ordinary course of the seller's business, and the seller has made a substantial beginning in manufacturing or procuring the goods.

Question 32

A bill of sale can be used as proof of an otherwise oral agreement.

Question 33

A merchant cannot revoke a firm offer to buy or sell goods if the merchant has:

A) promised to keep the offer open.
B) declared in the presence of two or more reputable witnesses that the offer will be kept open.
C) received consideration to keep the offer open.
D) stated in a signed letter that the offer would not be revoked for a specified period of time.

Question 34

The express period of irrevocability in a firm offer cannot exceed __________ month(s).

A) one (1)
B) three (3)
C) six (6)
D) twelve (12)

Question 35

When the price of the goods is $500 or more, a writing signed by the defendant is required in all cases.

Question 36

A transfer of possession, but not title, is called:

A) a bailment.
B) an option to purchase.
C) a gift
D) all of the above.

Question 37

A contract involving both services and goods is classified as a contract for the sale of goods if:

A) the services are to be performed upon the goods.
B) the services cannot be performed unless the goods are supplied.
C) no charge is made for the services.
D) the sale of goods is the dominant aspect of the transaction.

Question 38

To satisfy the statute of frauds, the writing must be signed and must include the price of the goods.

Question 39

The Uniform Commercial Code applies to:

A) new goods only.
B) used goods only.
C) both new and used goods.
D) none of the above.

Question 40

When an oral contract is made to sell a television set for $600, payment and acceptance of part of the purchase price avoids the bar of the statute of frauds.

Question 41

A sales agreement that does not satisfy the statute of frauds is:

A) a quasi contract.
B) criminal.
C) unenforceable.
D) unlawful.

Question 42

Janet Durham orally agreed to purchase certain computer hardware priced at $10,000 from Ted Stallings. The sale of the hardware also included a one-time setup service visit priced at $100. The total contract price amounted to $10,100. The computer hardware was delivered and set up, and Durham paid $10,100. Afterwards, Durham discovered that she could obtain the same goods and services from another seller for a total contract price of $9,100. She now seeks rescission of the contract, based on the fact that more than $500 in goods were involved in the sales transaction, that the contract between her and Stallings was subject to the statute of frauds as a result, and that the oral agreement between them was therefore unenforceable. Durham wants to return the computer hardware to Stallings, and receive reimbursement of $10,000 (She is willing to waive her claim to reimbursement for the $100 setup service visit.) Evaluate Durham's legal position in this matter.

Question 43

The provisions of the CISG have been strongly influenced by Article __________ of the UCC.

A) A
B) B
C) 1
D) 2

Question 44

Gonzalez Manufacturing negotiated by telephone to purchase approximately $7,000 worth of digital video recorders from Video Imports. The final details were worked out by telephone calls on April 2nd. On April 4th, Video sent Gonzalez a confirmation of their telephone agreement, which included pertinent details. Meanwhile, on April 3rd, Gonzalez was offered a better deal than Video's and accepted it. Upon arrival of the confirmation on April 6th, Gonzalez ignored it and did nothing further until May 1st, the date before Video was to deliver. On May 1st, Gonzalez informed Video that their contract was an unenforceable oral contract and that delivery would not be accepted.
When attempts to amicably settle the matter failed, Video sued Gonzalez for breach of contract. Decide.

Question 45

__________ represents a pattern of performance between the parties to a contract.

A) Course of dealing
B) Usage of trade
C) Course of trade
D) Usage of dealing

Question 46

An agreement to periodically deliver home-heating oil to a residential customer that does not indicate the duration of the contract

A) is enforceable for a reasonable period of time.
B) lasts for one delivery only.
C) is not a legally-enforceable contract.
D) constitutes a bulk transfer.

Question 47

Which term is not required in a writing in order to satisfy the statute of frauds?

A) language indicating that a sale or contract to sell has been made
B) the price of the goods
C) the quantity of goods involved in the transaction
D) the signature of the defendant

Question 48

As a general rule, courts will __________ in recovering money or property transferred under an illegal agreement.

A) assist a commercial buyer
B) assist a non-commercial buyer
C) assist an institutional buyer
D) not aid either party

Question 49

Which of the following can satisfy the statute of frauds writing requirement?

A) bills of sale
B) letters
C) telegrams
D) all of the above

Question 50

A sales contract must be evidenced by a writing if the sales price of goods is equal to or more than:

A) $100.
B) $300.
C) $500.
D) $1,000.

Question 51

Which of the following situations create(s) an exception to the statute of frauds writing requirement?

A) non-resellable goods
B) receipt and acceptance
C) payment
D) all of the above

Question 52

An illegal sale:

A) can be enforced if the illegality is unknown to the buyer.
B) is unenforceable.
C) qualifies as a bailment.
D) qualifies as a conditional sale.

Question 53

Newlog, which had developed a new process for making artificial logs, entered into an oral contract with Specialty Manufacturing. The contract provided that Specialty would manufacture a special part that Newlog needed to make its artificial log machinery. The contract provided that Specialty would make the part to Newlog's specifications. Newlog orally agreed to pay $5,000 for the part. Specialty made the part to Newlog's specifications, but Newlog refused to pay, claiming that the oral contract was unenforceable because of the statute of frauds. Is Newlog correct?