Deck 18: Introduction to Sales and Lease Contracts

Question 1

According to the UCC,one open term will cause a sales con?tract to fail for indefiniteness.

Answer 1

False

Question 2

A lease is NOT exempted from coverage under the UCC.

Answer 2

True

Question 3

The UCC imposes some different rules on merchants.

Answer 3

True

Question 4

A lessor is a party who transfers a right to the possession and use of goods under a lease.

Question 5

Article 3 of the UCC governs contracts for sales of goods.

Question 6

Under the UCC,a contract for a sale of goods that includes more than one open term is void.

Question 7

A merchant is a person who deals in goods of the kind involved in the sales contract or who holds herself or himself out as having skill or knowledge peculiar to the practices or goods being purchased or sold.

Question 8

Stocks are an example of property that is governed by the UCC Article 2.

Question 9

If there is no definite period stated,a firm offer by a merchant is irrevocable without the necessity of consideration for up to six months.

Question 10

A contract for the sale of minerals is considered to be a contract for the sale of goods if the severance is to be made by the seller.

Question 11

For an item to be characterized as a "good" under the UCC,it must be intangible.

Question 12

Tangible property has physical existence.

Question 13

A sale of "things attached to the land" is always considered a sale of goods.

Question 14

Sales contracts are governed exclusively by Article 2 of the UCC.

Question 15

Under the UCC,parties to sales and lease contracts are NOT free to establish whatever terms they wish.

Question 16

Real estate transactions are always governed by Article 2 of the UCC.

Question 17

A firm offer by a merchant may be oral.

Question 18

The UCC imposes the same rules on all parties in all circumstances.

Question 19

Article 2 of the UCC covers any transaction that creates a lease of goods.

Question 20

A lessee is a party who acquires a right to the possession and use of goods under a lease.

Question 21

Under the UCC,an agreement modifying a contract needs no considera?tion to be binding.

Question 22

A court can refuse to enforce a contract that the court deems to have been unconscionable at the time it was made.

Question 23

Generally,acceptance of an offer to lease goods may be made in any reasonable manner and by any reasonable means.

Question 24

Under the UCC,if a contract is unilateral,the offeror must be notified of the of?feree's performance.

Question 25

Under the UCC,prompt shipment of goods is considered an acceptance of an offer to buy the goods.

Question 26

At common law,if a contract is unilateral,an offeror must be notified of the offeree's performance.

Question 27

All oral contracts are enforceable under the UCC.

Question 28

Under the UCC,an oral contract for a sale of goods is enforceable once payment has been made and accepted.

Question 29

A course of performance is the conduct that occurs under the terms of a particular agreement.

Question 30

Mary owns a small real estate company that arranges apartment leases for college students.She leases an apartment for nine months to Sara,a new undergraduate in the area.On her son's eighteenth birthday,Mary gives him a gift of a car.On her daughter's sixteenth birthday,Mary gives her a gift of $500.Mary sells her home gym to her neighbor for $1,000.Which of Mary's transactions would be covered by Article 2 of the UCC?

A)The nine month lease of the apartment
B)The gift of the car
C)The gift of the $500
D)The sale of the home gym

Question 31

Rally Corporation enters into a contract to sell ski gear to SnoSportz Company,which sells a pair of the skis to Tyra,a consumer,who later sells them to Uli,another consumer.Article 2 of the UCC applies to the sales transactions between

A)all of the buyers and sellers.
B)Rally and SnoSportz only.
C)SnoSportz and Tyra only.
D)Tyra and Uli only.

Question 32

The UCC requires that the mirror image rule be followed for all acceptances.

Question 33

Over the course of a year,Retail Marketers,Inc.,sells goods from its inventory and one of its warehouses.In exchange,Retail receives checks and other items that substitute for cash,which Retail uses to repay a loan from Savings Bank.Article 2 of the UCC governs

A)the checks.
B)the payment of the loan.
C)the sale of the buildings.
D)the sale of the goods.

Question 34

The rules governing firm offers apply to all merchants.

Question 35

If a nonmerchant-seller's offer expressly conditions acceptance on a nonmerchant-buyer's agreement to the terms of the offer,the buyer's positive response is an acceptance even if it contains additional terms.

Question 36

Under the "partial performance" exception to the UCC,an oral contract for goods worth more than $500 is enforceable if the goods are specially manufactured for a particular buyer.

Question 37

No oral contract is enforceable under the UCC.

Question 38

An unconscionable contract is a contract so one-sided and unfair at the time it is made that enforcing it would be unreasonable.

Question 39

Bild-Rite,Inc.,is a Colorado-based firm that does business with clients throughout North America.Bild-Rite oversees construction projects,and buys and sells commercial buildings,undeveloped land,and construction supplies and other goods.Bild-Rite has had to deal with work-site theft and vandalism.With respect to these circumstances,the Uniform Commercial Code (UCC) provides a framework for

A)commercial transactions for the sale of and payment for goods.
B)international construction contracts.
C)domestic and foreign transactions in real estate.
D)prosecuting crimes against business interests.

Question 40

Over the course of a year,Real Deal Corporation sells appliances to customers to whom it extends credit.Real Deal orders the appliances from Superior Appliance Company's warehouse,from which the items are shipped via common carrier to Real Deal's customers.Article 2 of the UCC governs

A)all of the parties' sales of the goods.
B)Real Deal's extension of credit.
C)Superior's storage of the goods.
D)the common carrier's delivery of the goods.

Question 41

Nature's Products,Inc.,sends its standard order form to Interbusiness Distribution Corporation (IDC) to evidence a sale of packing materials. IDC responds with its own standard purchase order form. Additional terms in the purchase order automatically become part of the contract unless

A)the terms materially alter the original contract.
B)the original offer expressly required acceptance of its terms.
C)the offeror objects to the new terms within a reasonable time.
D)any of the choices.

Question 42

Orange Manufacturing Corporation (OMC) orders twelve job-training and on-the-job safety DVDs from Plum Productions,Inc.,which delivers the disks to OMC's plant.This is most likely

A)a gift.
B)a lease of goods.
C)a sale of goods.
D)a service contract.

Question 43

Retail Music,Inc.,offers to buy from Super Products Corporation (SPC) 1,000 blank CDs of a certain brand.Without notifying Retail,SPC timely ships CDs of a different brand.This shipment is

A)an acceptance of the offer and a breach of the parties' contract.
B)an acceptance of the offer and a fulfillment of the parties' contract.
C)a refusal of the offer and a breach of the parties' contract.
D)a refusal of the offer and a fulfillment of the parties' contract.

Question 44

Community Construction Corporation offers to buy from Solid Cement Company a certain quantity of cement for a certain price.Solid can ac?cept the offer by

A)doing nothing.
B)promising to ship or promptly shipping the cement.
C)promising to ship the cement only.
D)promptly shipping the cement only.

Question 45

Dan,a computer programmer,holds a garage sale to sell a lawnmower,some clothes,some CDs and some old clothes.Will,a lawyer,sells Thelma his collection of seashells.Philip,a CEO of a successful company,sells George his pet parakeet.Judy,an expert horse trainer,sells Bob a horse.Which person would be considered a merchant under the UCC?

A)Dan
B)Will
C)Judy
D)Philip

Question 46

In a dispute over a sale involving a bicycle,Dain argues that as to this deal Emil's Hobby Shop,where Dain bought the bike,is a merchant.A court may determine whether Emil's is a merchant by assessing whether

A)it has sold any bikes within the last year.
B)it holds itself out by occupation as having knowledge or skill unique to the bike in the transaction.
C)its owner enjoys biking.
D)it subscribes to Bike,a biweekly trade magazine.

Question 47

Jacob offers to sell Bill a valuable collection of baseball cards.In order for the transaction between Jacob and Bill to be considered a sale under the UCC,Bill

A)must pay for the cards in cash.
B)must pay for the cards with services.
C)may pay for the cards with cash or other goods or services.
D)must pay the fair market value of the cards.

Question 48

VuTech Company agrees to sell digital video equipment to Home & Business Stores,Inc.,for Home & Business to sell to its customers.Their contract will not be en?forceable unless it includes

A)the duration of the deal.
B)the price of the goods.
C)the quantity of the goods.
D)the requirements of OSI's customers.

Question 49

Margaret,who is not an expert on horses,offers to sell a horse,a saddle blanket,and a bridle to her neighbor Betty for $2,000.Betty signs the bill of sale and pays the $2,000,but says that she wants a saddle as well.If Margaret does not give Betty a saddle along with the other goods and Betty files suit against Margaret for breach of contract,the court will probably

A)require Margaret to give Betty a saddle and not require Betty to pay any more money.
B)void the entire contract and return both parties to their initial status.
C)enforce the contract according to the original terms.
D)require Margaret to give Betty a saddle,but also require Betty to pay Margaret more money.

Question 50

Finest Coffee Company agrees to buy an unspecified quantity of coffee beans from Global AgriCorp.Global breaches the contract.Finest can most likely

A)enforce the agreement to the extent of a reasonable quantity.
B)enforce the agreement to the extent of Finest's requirements.
C)enforce the agreement to the extent of Global's output of coffee beans.
D)not enforce the agreement.

Question 51

Dave leases a bulldozer from Construction Rentals,Inc.Wilson from Construction Rentals delivers the bulldozer to Dave,but does not collect any money.Sally from Construction Rentals picks up the bulldozer from Dave and collects the payment for the lease from Dave on behalf of Construction Rentals.In this situation the lessee is

A)Wilson.
B)Dave.
C)Sally.
D)Construction Rentals.

Question 52

Peter,an agent for Zippy Cars,Inc.,writes a letter to Cassandra on March 1 stating that he will sell her a 2011 Subaru Outback for $20,000 between March 1 and April 30.Peter's letter to Cassandra is

A)a firm offer.
B)an acceptance.
C)a bilateral contract.
D)a breach.

Question 53

Julia leases an apartment in Washington,D.C.for $2,200 per month.She buys a TV and a stereo system for $500.When she needs to visit her aunt in Virginia,Julia leases a car for the day for $65.Which of Julia's transactions is/are governed by Article 2A of the UCC?

A)The apartment lease only
B)Both the apartment lease and the car lease
C)The car lease only
D)The TV and stereo purchase only

Question 54

Wilbert has a lot of property that he wishes to sell.He sells his car to John for $5,000.He sells his bike to Shelby for $600.He sells his extensive DVD collection to Dixie May for $1,000.He sells a patent to a device for organizing digital music files to Gary for $400.Which of Wilbert's sales is NOT covered by Article 2 or 2A of the UCC?

A)The sale of the car
B)The sale of the bike
C)The sale of the DVD collection
D)The sale of the patent

Question 55

Curtis enters into a contract with Drive-Away Lease Company for a three-year lease of a car.This contract is subject to

A)Article 2 of UCC.
B)Article 2A of the UCC.
C)Article 3 of the UCC.
D)the common law only.

Question 56

Expert Stitching Corporation enters into a contract to sell denim clothing to Fine Fashion Company,which in turn sells a pair of jeans to Grady,a consumer.In contrast to standards that apply to consumers,the UCC imposes on merchants

A)less strict legal standards.
B)special business standards.
C)stricter ethical standards.
D)the same overall standards.

Question 57

Jamie is redoing his kitchen and decides he needs a floor sander to complete the job.Jamie tells Rachel,his neighbor,that he needs a floor sander.Rachel tells Jamie to call Home Repair Rentals,Inc.Home Repair Rentals leases Jamie a floor sander.In this transaction the lessor is

A)Jamie.
B)Rachel.
C)Home Repair Rentals.
D)both Jamie and Rachel.

Question 58

Mountaineer Sales,Inc.,is the offeror and Camping Goods Corporation is the offeree under a unilateral sales contract in which Forest Recreation Products Company is also interested.Mountaineer is not notified of Camping's performance within a rea?son?able time.Mountaineer

A)may treat the offer as having lapsed.
B)must assume that Camping has started to perform.
C)must contact Camping.
D)must contract with Forest.

Question 59

Perfect Potato Chip Company makes an offer that Snack Foods Corporation would like to accept.Under the "mirror image rule" relating to offer and acceptance,an acceptance

A)may include additional terms not contained in the offer so long as they do not materially alter the agreement.
B)may include additional terms not contained in the offer that will be?come part of the agreement if the offeror does not object within a reasonable period of time.
C)must include only those terms and conditions contained in the offer.
D)may contain additional terms as long as all parties agree to the additional terms.

Question 60

Roy's Chick'n Shack orders chicken from Standard Food Supplier,but Standard does not deliver.Roy's will probably be unable to enforce the agreement if the parties

A)did not limit the duration of the deal.
B)did not specify a payment term.
C)did not specify a quantity term.
D)have not begun to perform.

Question 61

Equipment Rental Corporation and Floodlights,Inc.,are parties to an oral agreement for a lease of goods with payments in excess of $10,000.They may satisfy the Statute of Frauds by

A)mutually agreeing not to commit fraud.
B)restating the terms in a phone call.
C)setting out the terms in an e-mail.
D)shaking hands on the deal.

Question 62

Jackson owns an antiques store.He sells a grand piano to Fred for $5,000,a old jukebox to Sam for $499,an antebellum chest of drawers to Josephine for $659 and a gold ring to Wendy for $999.Which of Jackson's sales must be in writing to be enforceable?

A)The grand piano only
B)The grand piano and the gold ring only
C)The grand piano,the chest of drawers and the gold ring only
D)The grand piano,the chest of drawers,the jukebox and the gold ring

Question 63

Gail enters into a contract with Hi-Price Appliances,Inc.In a suit be?tween the parties over payment under the contract,Gail claims that a certain clause is unconscionable.If the court agrees,it may

A)enforce,limit,or refuse to enforce the contract or the disputed clause.
B)enforce the contract without the disputed clause only.
C)limit the application of the disputed clause only.
D)refuse to enforce the entire contract only.

Question 64

Clean Machines Company makes washing machines.Over the phone,Clean offers to sell Dealers Appliance Outlet one hundred model EZ2000 washers at a price of $150 per unit.Clean says that it will keep the offer open for ninety days.Dealers responds that within two or three weeks it will decide whether to accept.One week later,Clean faxes,and Dealer receives,notice that the offer is withdrawn.Dealer immediately phones Clean to accept the $150-per-unit offer.When Clean refuses to deliver at that price,Dealer files a suit.Clean asserts,first,that there is no contract and,second,that if there is a contract,it is unenforceable.Discuss Clean's assertions.

Question 65

Tune Products,Inc.,offers to sell to Unlimited Sales Company one hundred MP3 players at $50 a piece,subject to certain specific delivery dates.Unlimited replies with a signed purchase order that reads,"Accept your of?fer for 100 I-appliances at $50 each. Must be delivered to our ware?house." Tune does not respond or deliver the goods.Unlimited files a suit for breach of contract,to which Tune answers that there is no contract because Unlimited's purchase order contained additional terms and is not signed by Tune.Can Unlimited recover? Explain.

Question 66

Trend-Rite Clothiers,Inc.,sells t-shirts to Brand Name Stores,Inc.,under an existing con?tract.When textile costs increase,Brand agrees to a price increase,but later wants to cancel the con?tract.Brand may

A)cancel the contract immediately.
B)cancel the contract only after accepting a final shipment.
C)cancel the contract only on reasonable notice.
D)not cancel the contract.

Question 67

Quinn enters into a series of agreements with Reba involving a sale of a Suite Dreams Motel,including the land,building,furnishings,shares of stock in Suite Dreams Company,and a contract with Trudy to create an ad campaign.Reba suspects that Quinn may be misrepresenting the facts.The UCC Statute of Frauds governs

A)the sale of any of the property evidenced by a writing.
B)the entire deal,including the marketer's services.
C)the sale of the furnishings priced at $500 or more.
D)the sale of the land and the building.

Question 68

Raul agrees to ship to Ben one hundred ceil?ing fans for $5,000.Raul ini?tials his notes of the deal,which in?clude the terms,and files the notes in his office. Ben initials his own notes of the deal,which include the terms,and files the notes in his office.Raul fails to ship the fans. Against Raul,as a contract,the deal is

A)enforceable,because under the UCC a contract need not written.
B)enforceable,because Raul's initialed notes are a sufficient writing.
C)enforceable,because Ben's initialed notes are a sufficient writing.
D)not enforceable.

Question 69

Rita,the manager of the State University (SU) soccer team,orally agrees to lease a certain number of specially made SU banners from Top Banners,Inc.This lease is enforceable only if Top has made a substan?tial start on making the banners and

A)Rita agreed to the lease on behalf of the SU soccer team.
B)SU does not have other,similar banners available.
C)the banners are not suitable for others in the course of Top's business.
D)the soccer season has not ended and SU goes to the finals.

Question 70

Great Grain Farms offers to sell Hearty Bakeries,Inc.,fifty bushels of wheat.Hearty's representative Milena responds,"We agree to buy fifty bushels only if the wheat is Grade A quality." Between Great Grain and Hearty

A)a contract is formed.
B)a contract is formed only if Great Grain can deliver the wheat fast.
C)Milena's statement is not an acceptance.
D)Milena's statement is an acceptance.

Question 71

Timber Products,Inc.,and Walt,a consumer,enter into a contract for a sale of plywood.If the contract includes a clause that is perceived as grossly unfair to Walt,its enforcement may be challenged under the doc?trine of

A)good faith.
B)square dealing.
C)the mirror image rule.
D)unconscionability.

Question 72

Fresh Produce,Inc.,and Great Grocery Stores dispute the interpretation of an ambiguous phrase in their contract.In a suit between the parties to con?strue the contract,a court may accept evidence of

A)consistent additional terms only.
B)consistent additional terms and contradictory terms only.
C)contradictory terms only.
D)anything extrinsic to the contract.