Deck 17: Sales

Question 1

The contract for a present sale of goods or for a sale of future goods is a(n):

A) contract for sale.
B) negotiation for sale.
C) accord of sale.
D) non-existent contract.

Answer 1

A

Question 2

A conditional sales contract is one way of selling merchandise with the condition that title will remain with the buyer until the purchase price has been paid.

Answer 2

True

Question 3

Goods that physically exist and are owned by the seller at the time of sale are considered:

A) accessible goods.
B) existing goods.
C) scarce goods.
D) profitable goods.

Answer 3

B

Question 4

In an entire and divisible sales contract, if all the components are interdependent and are included in the same order, an entire contract payment for the contract is required before the whole order is filled.

Question 5

A legally enforceable agreement that has as a purpose the immediate transfer of title to personal property in return for consideration is a contract for sale.

Question 6

Contracts for services are not covered by the Uniform Commercial Code.

Question 7

If a buyer refuses to accept delivery of goods, the seller can store the goods for the buyer and sue to recover the sales price if the goods are not readily resalable to another customer.

Question 8

A sales contract must be signed by the affected parties.

Question 9

A sales contract for goods of special design, construction, or manufacture is a contract for labor and materials.

Question 10

The Uniform Commercial Code (UCC) does not cover contracts for:

A) investment securities.
B) leases.
C) sales.
D) services.

Question 11

According to the UCC, a sale is:

A) a payment for goods.
B) a negotiated transaction.
C) the passing of title from the seller to the buyer for a price.
D) a void transaction.

Question 12

In the event that the seller delivers goods that are not as specified in the contract, the buyer may revoke the contract and return the goods that are substantially different from those that were ordered.

Question 13

The term for goods that do not exist at the time of sale, such as crops and unborn livestock, is:

A) expected goods.
B) nonexistent goods.
C) future goods.
D) intangible goods.

Question 14

When a contract provides for the sale of goods subject to the buyer's approval, the transaction is a sale on return.

Question 15

A contract for sale with the right of return gives the buyer the opportunity to return them to the seller at a later time, but does not give the buyer title.

Question 16

Goods that exist at the time of the sales transaction and are expected to come into the possession of the seller are considered future goods.

Question 17

If a seller fails to deliver goods as promised, the buyer cannot buy similar goods to substitute for those not delivered.

Question 18

Title to goods shipped free on board destination passes before the goods are delivered to the buyer.

Question 19

When a purchaser takes title to goods but has the right to return them within a specified or reasonable time, the purchaser must assume all the obligations of ownership while the goods are in his or her possession.

Question 20

Stoppage in transit is the right of an unpaid seller to stop goods in transit and order the carrier to hold them for the seller.

Question 21

When the buyer is insolvent, the UCC provides the seller with the right of:

A) action in shipment.
B) strike in transfer.
C) walk out in transit.
D) stoppage in transit.

Question 22

A reputed merchant will agree to a sale or return in order to maintain:

A) balance.
B) inventory.
C) goodwill.
D) consignments

Question 23

A contract of selling merchandise with the condition that title will remain with the seller until the purchase price has been paid is a:

A) provisional purchase.
B) qualified sales contract.
C) conditional sales contract.
D) restrictive purchase contract.

Question 24

When the buyer refuses to pay the purchase price and the seller has the possession of the goods, the seller may:

A) resell the goods and sue the buyer.
B) get the buyer arrested.
C) destroy the goods and sue the buyer.
D) manhandle the buyer.

Question 25

There is a possibility of expensive pieces of property being sold at auction for a pittance simply because no one offered a higher bid. This possibility occurs only at an auction:

A) with advertisements.
B) without reserve.
C) without advertisements.
D) with reserve.

Question 26

A contract in which title and risk of loss remain with the seller and that provides for the sale subject to the buyer's final decision is a(n):

A) endorsement of contract.
B) sale on approval.
C) contract to sell.
D) FOB contract.

Question 27

The UCC provides that, in the absence of negligence or fraud, legal action to remedy a breach of sales contract must be started within ________from the breach.

A) four years
B) two years
C) five years
D) eight years

Question 28

The sale of goods can be made with the understanding that the purchaser takes title to the goods but has the right to return them within:

A) one year.
B) a period of one month.
C) a period of two months.
D) a reasonable time.

Question 29

A contract for labor and materials to be enforceable, even though it involves $500 or more:

A) must be entered by parties owning a business.
B) must be certified by notary.
C) should always be in writing.
D) need not always be in writing.

Question 30

When goods are shipped free on board (f.o.b.) shipping point by common carrier, title passes from the seller to the buyer when the goods:

A) are delivered to the buyer.
B) are turned over to the carrier.
C) are sold.
D) reach the carrier's warehouse.

Question 31

When goods are sold free on board (f.o.b.) shipping point, title to the goods passes from the seller to the buyer when the carrier ________ the shipment.

A) discards
B) receives
C) deports
D) retreats

Question 32

In sales contracts, the complete agreement need not be in writing, but there must be some evidence of the:

A) purpose of the seller.
B) objective of the buyer.
C) fraud of the parties.
D) intention of the parties.

Question 33

At an auction sale, the seller is the owner of the goods and the buyer is the party:

A) conducting the transaction.
B) making the offer.
C) giving the opinion.
D) abstaining from negotiation.

Question 34

In entire and divisible contracts, until the whole order is filled, the payment of contract:

A) is obligatory.
B) is compulsory.
C) is not required.
D) is mandatory.

Question 35

FOB. is the abbreviated form of:

A) free on board.
B) freight on board.
C) freight on bail.
D) freedom on bail.

Question 36

A sales contract for goods of special design, construction, or manufacture is a contract for:

A) specialty goods.
B) labor and materials.
C) design.
D) manufacturing.

Question 37

A contract that gives the buyer title to goods and the opportunity to return them to the seller at a later time is a:

A) contract for sale with the right of return.
B) sale on approval of the buyer.
C) contract to sell.
D) trial contract.

Question 38

When the buyer refuses to accept delivery of the goods the seller may:

A) manhandle the buyer for rejection.
B) wait for the buyer to receive the goods.
C) destroy the goods and sue the buyer.
D) sue to recover the sales price.

Question 39

Title to goods shipped free on board (f.o.b.) destination passes when the goods are delivered to the buyer. In the event of their loss, the cost of transporting the goods is paid:

A) to the carrier by the buyer.
B) to the seller by the buyer.
C) to the seller by the carrier.
D) to the carrier by the seller.

Question 40

Before the hammer falls, a bidder __________________.

A) may retract the bid at any time.
B) may never retract the bid.
C) does not have a valid offer.
D) may retract the bid only within five seconds of the bid.

Question 41

Explain sellers' remedies for breach of a sales contract. Provide an example.

Question 42

Explain contract of sale with right of return.

Question 43

Use an example to explain buyers' remedies for breach of a sales contract.

Question 44

Describe the purpose and terms of a conditional sales contract.

Question 45

How does the transfer of title differ in a contract for sale and a contract to sell?