Deck 16: Sales and Leases

Question 1

UCC Article 2 applies to sales of goods, real estate, and services.

Answer 1

False

Question 2

If performance is commercially impracticable, the perfect tender rule no longer applies.

Answer 2

True

Question 3

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

Answer 3

True

Question 4

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

Question 5

Once the time for performance under the contract has expired, the seller or lessor can never exercise the right to cure.

Question 6

Tender of delivery requires that the seller or lessor hold the goods at the buyer's or lessee's disposal, but not that the goods be conforming.

Question 7

The duty of good faith is imposed on the parties involved in contracts subject to the Uniform Commercial Code.

Question 8

Under the UCC, a firm offer for a sale or lease of goods made by a merchant can be revoked at any time before acceptance.

Question 9

In a contract between merchants, additional terms in the parties' separate standard forms can automatically become part of the contract.

Question 10

Under the UCC, a sales or lease contract will fail for indefiniteness if one or more terms are left open.

Question 11

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

Question 12

All oral contracts are enforceable under the UCC.

Question 13

A firm offer by a merchant may be oral.

Question 14

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

Question 15

The UCC imposes some different rules on merchants.

Question 16

Under the UCC, if a contract does not designate the place of delivery for the goods, then the goods must be made available at a location halfway between the seller's and the buyer's places of business.

Question 17

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

Question 18

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

Question 19

The seller's or lessor's basic obligation under a sales contract is to tender conforming goods to the buyer or lessee.

Question 20

Under the perfect tender rule, if tender is not perfect, the seller is obligated to try again.

Question 21

Goods that are merchantable are fit for any purpose.

Question 22

Fresh Harvest, Inc., agrees to sell to Gina's Bed & Breakfast Inn a certain amount of locally grown produce each week but no mention is made of where the goods are to be delivered.In general, the UCC requires that the delivery take place at

A)a neutral place of business halfway between the parties' locations.
B)a "reasonable" place of delivery.
C)Fresh Harvest's place of business.
D)Gina's place of business.

Question 23

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 24

Unless otherwise agreed, inspection of goods can take place at any reasonable place and time and in any reasonable manner.

Question 25

FlavorBean Coffee Company agrees to buy an unspecified quantity of coffee beans from Global AgriCorp.Global breaches the contract.In FlavorBean's suit to obtain relief, the court will most likely

A)award a reasonable quantity of beans to FlavorBean.
B)award FlavorBean all the beans that it requires.
C)award Global's output of coffee beans to FlavorBean.
D)have no basis for determining a remedy.

Question 26

Rikki and Sid enter into a sales contract for tennis equipment.With respect to the specific contractual provisions set out in the UCC, Rikki and Sid may

A)agree to different terms only to a reasonable extent.
B)agree to different terms unless they "get caught."
C)agree to whatever terms they wish.
D)not agree to different terms.

Question 27

In most sales, sellers warrant that they have good and valid title to the goods sold.

Question 28

A seller who makes a statement that relates to the value or worth of the goods creates an express warranty.

Question 29

If a buyer breaches a contract and the seller resells the goods to another party, the seller cannot hold the breaching buyer liable for any loss.

Question 30

Implied warranties can arise from a "usage of trade."

Question 31

If the parties to a sales contract state that a certain remedy is exclusive, then it is the sole remedy.

Question 32

Merchants are required to warrant that the goods they sell or lease are fit for the particular purpose for which a buyer or lessee will use the goods.

Question 33

Five Star Flooring orders carpet from Textile Mills Corporation, but Textile does not deliver.Five Star will probably not be able to enforce the agreement if the parties omitted

A)a delivery term.
B)a payment term.
C)a quantity term.
D)a price term.

Question 34

Goods must be of the highest quality possible to be merchantable.

Question 35

To constitute an express warranty, a representation must be in writing.

Question 36

Implied warranties can arise as a result of a course of dealing.

Question 37

Puffery creates an express warranty.

Question 38

Express warranties can not be disclaimed in contracts.

Question 39

The parties to a sales or lease contract can vary their respective rights and obligations by contractual agreement.

Question 40

If a contract specifies a certain carrier, a substitution of a different carrier for any reason breaches the contract.

Question 41

Julia orders twelve violins for her music shop from Notable Notes Instrument Manufacturers.The sale is made on credit.Julia orders the violins on May 1, Notable Notes ships the violins on May 2, and Julia receives the violins on May 4.Julia sells all the violins by June 15.Julia's credit period most likely began on

A)May 1.
B)May 2.
C)May 4.
D)June 15.

Question 42

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 43

Shane's Auto Parts orders twenty tires from Tough Tires, Inc.The truck delivering the tires to Shane's is in an accident and ten of the tires are damaged.Shane's Auto Parts

A)must accept the entire shipment.
B)can resell the goods without obligation to the seller.
C)may inspect the tires and make a partial acceptance.
D)must reject the entire shipment.

Question 44

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 45

Gleaming Gem Corporation agrees to sell Jewelry Outlets, Inc.(JOI), fifty new diamonds, but the contract does not specify a place of delivery.JOI is expected to pick up the goods.The place of delivery is

A)Gleaming's place of business.
B)JOI's place of business.
C)the Annual Gems and Jewels Convention.
D)the U.S.Postal Service office nearest to JOI's place of business.

Question 46

Levi's Toy Store orders one hundred board games from Big Board Games Warehouse.When the games are delivered, they are all missing pieces.Levi's Toy Store rejects the shipment.Big Board Games wants to cure.Big Board Games must

A)seasonably notify Levi's Toy Store of the intent to cure.
B)pay Levi's Toy store a cure fee.
C)send a truck to pick up the nonconforming goods before the end of the business day.
D)create a new contract with Levi's Toy Store.

Question 47

Mitch and Nadine enter into a contract for a sale of seventy-six specially made motion detectors.When Nadine does not deliver within a reasonable time after the agreed delivery date, Mitch files a suit for breach.Nadine asserts the doctrine of commercial impracticability.This doctrine extends only to problems that are

A)foreseen.
B)preventable.
C)unforeseen.
D)ordinarily assumed by a seller or lessor.

Question 48

Readymade Construction Corporation offers to buy from Set-Still Cement Company a certain quantity of cement for a certain price.Set-Still can accept the offer by

A)a material alteration of the terms within a reasonable time.
B)a promise to ship or a prompt shipment of the cement.
C)a prompt shipment of the cement only.
D)a shipment of nonconforming goods with a notice of accommodation.

Question 49

On January 10, Winchester Pet Supplies orders fifty small dog collars from Quality Collars, Inc.to be delivered by January 15.On January 13, Quality Collars tenders fifty large dog collars.Winchester Pet Supplies rejects the shipment.Quality Collars has

A)no right to cure.
B)until January 15 to cure.
C)until the end of the business day on January 13 to cure.
D)unlimited time to cure.

Question 50

Beef Burgers, Inc.contracts to buy five hundred steers from Fattening Feedlots.Before Fattening Feedlots can deliver the steers, there is an outbreak of disease in the feedlot, and all the cattle are quarantined.In this case the perfect tender rule

A)applies to both parties.
B)does not apply.
C)applies only to Beef Burgers.
D)applies only to Fattening Feedlots.

Question 51

Big Eggs, Inc.agrees to supply Omelet Express with five hundred eggs.Big Eggs cannot reasonably ask Omelet Express to pick up the eggs at

A)1:00 P.M.
B)2:00 P.M.
C)3:00 P.M.
D)4:30 A.M.

Question 52

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 reasonable 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 53

Kim's Pony Rides orders ten saddles from Little Horse Saddles, Inc.The sales contract states that if the saddles are defective, Kim's only remedy is the repair or replacement of the saddles.When the saddles arrive, they are defective.In this case, the agreed-on remedy is

A)exclusive of all others.
B)in addition to those provided in the UCC.
C)in violation of the perfect tender rule.
D)commercially impracticable.

Question 54

Peter, an agent for Zippy Cars, Inc., writes a letter to Cassandra on March 1 stating that he will sell her a 2011 Suburu 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 55

Jean buys a bike from Mike's Bike Shop.She wants to make sure that there is a warranty of title.Jean

A)does not need to do anything because warranties of title arise automatically in most sales contracts.
B)must request a written warranty of title.
C)must request an oral warranty of title.
D)must request both a written and an oral warranty of title.

Question 56

Consuelo and Gabriela enter into a contract for a sale of saxophones and other brass instruments.Consuelo delivers, but Gabriela does not pay.Consuelo can normally recover as damages

A)any profit lost minus any loss avoided.
B)whatever amount the seller wishes to claim.
C)the purchase price plus incidental damages.
D)the market price at the place at which the seller delivered the goods.

Question 57

Sally's Sweet Fruits contracts with Fruits to You, Inc.for a delivery of two hundred pounds of strawberries to be delivered by Keep Kool Trucking, a trucking company with refrigerated trucks.On the day of delivery, the refrigeration units on Keep Kool's trucks are not working.Fruits to You

A)may ship the goods to Sally's using another trucking company with refrigerated trucks.
B)must refund Sally's money and cancel the contract.
C)must wait to ship the strawberries until Keep Kool has fixed its trucks.
D)must ship the goods through a different carrier and pay Sally incidental damages.

Question 58

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 59

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

A)mutually agreeing not to commit fraud.
B)repeating the terms in a phone call.
C)setting out the terms in a memo.
D)shaking hands on the deal.

Question 60

Silas Paving Co.contracts to buy some construction machinery from Massive Earthmovers, Inc.Before either party performs, Massive sells its assets to Phoenix Equipment Corp.On learning of the sale, Silas is concerned about its contract with Massive.Silas should

A)demand assurances of performance from Massive.
B)consider the contract repudiated and sue Massive for breach.
C)buy the machinery from a different supplier and bill Massive for the price.
D)buy the machinery from a different supplier and bill Phoenix for the price.

Question 61

Concrete Products, Inc., assures Deepwater Construction Company (DCC)that Concrete's cement will not crack within a certain range of pressure.This "assurance" is

A)puffery.
B)an express warranty.
C)an implied warranty.
D)a warranty of title.

Question 62

Sigrud buys spiked mountain-climbing shoes from Rockridge Gear store.The spikes come out of the shoes when Sigrud is on the side of a mountain, causing her to be injured in a fall.Rockridge breached

A)an express warranty.
B)an implied warranty of fitness for a particular purpose.
C)an implied warranty of merchantability.
D)a warranty of title.

Question 63

Parker, a salesperson for Quality Textiles, Inc., shows Rosa, a fabric buyer for Style Clothing Company, samples of cloth, stating that any shipment will match the samples.This statement is

A)an express warranty.
B)an implied warranty.
C)a warranty of title.
D)puffery.

Question 64

Fancy's Feedlot orders one hundred sacks of cattle feed from Bovine Feeders, Inc.Each bag has the words "Twenty percent protein" printed on the front.This is

A)an express warranty.
B)an implied warranty.
C)a warranty of title.
D)puffery.

Question 65

Barry buys a bulldozer from Big Sandbox Equipment Company.Barry is unaware that there is a lien against the bulldozer when he buys it.Under the UCC, if the creditor repossesses the bulldozer, Barry can

A)recover from Big Sandbox Equipment for breach of warranty.
B)do nothing.
C)file criminal charges against Big Sandbox Equipment.
D)recover damages from the creditor.

Question 66

Olga, a salesperson for Pre-owned Cars & Trucks, Inc., tells Quincy, "This is the best car I've ever seen." This statement is

A)an express warranty.
B)an implied warranty.
C)a warranty of title.
D)puffery.

Question 67

Robert is selling his used lawnmower.He wants to disclaim any implied warranties.Robert

A)can not disclaim implied warranties.
B)should include a written disclaimer that the lawnmower is being sold "as is."
C)should orally disclose all known faults of the lawnmower.
D)should include a written warranty of title.

Question 68

Signal Sets Company contracts to deliver one hundred 52-inch plasma high-definition television sets to a new retail customer, Tuner TV Store, on May 1, with payment to be made on delivery.Signal tenders delivery in its own truck.Tuner's manager notices that some of the cartons have scrape marks.Tuner's owner phones Signal's office and asks whether the sets might have been damaged as they were being loaded.Signal assures Tuner that the sets are in perfect condition.Tuner tenders Signal a check, which Signal refuses, claiming that the first delivery to new customers is always for cash.Tuner promises to pay the cash within two days.Signal leaves the sets with Tuner, which stores them in its warehouse pending its "Grand Opening Sale" on May 15.Two days later, Tuner's stocker opens some of the cartons and discovers that a number of the sets are damaged beyond ordinary repair.Signal claims Tuner has accepted the sets and is in breach by not paying on delivery.Will Signal succeed on these claims Explain.

Question 69

Fred goes to Carla, a knowledgeable dog breeder, and tells her that he wants to get a dog that will be good with small children.Carla sells Fred a dog.When Fred takes the dog home, it bites both his small children and causes them serious injuries.Fred can sue Carla for breach of

A)an express warranty.
B)an implied warranty of fitness for a particular purpose.
C)an implied warranty of merchantability.
D)a warranty of title.

Question 70

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 offer for 100 I-appliances at $50 each.Must be delivered to our warehouse." 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 71

Dorothy eats a candy bar made and sold by Eastwich Candy Corporation and becomes ill.Dorothy files a suit against Eastwich, alleging that the candy bar was not merchantable.Merchantable food is food that is fit to eat on the basis of

A)consumer expectations.
B)what constitutes a perfect condition.
C)its maker's intentions.
D)its producer's experience.

Question 72

Sari buys a new sport utility vehicle (SUV)from 'Tastic Cars & Trucks, Inc.The most important factor in determining whether an express warranty is created is whether

A)Sari expresses to 'Tastic what she wants warranted.
B)Sari's desire for the SUV becomes part of her motivation to deal.
C)'Tastic expresses to Sari what it expects of its customers.
D)'Tastic's promise becomes part of the basis of the bargain.