Deck 19: B: The Formation of Sales and Lease Contracts

Question 1

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

Answer 1

False

Question 2

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

Answer 2

True

Question 3

If the parties to a contract for a sale of goods have not agreed on a price,a court will determine a reasonable price at the time for delivery.

Answer 3

True

Question 4

Whenever the parties to an international transaction fail to specify in writing the precise terms of the contract,the United Nations Convention on Contracts for the International Sale of Goods (CISG)will be applied.

Question 5

In interpreting a commercial agreement,a court will assume that the course of dealing between the parties was taken into account.

Question 6

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

Question 7

Goods associated with real estate never fall within the scope of UCC Article 2.

Question 8

The terms of a fully integrated contract can be contradicted only by evidence of any prior agreements.

Question 9

Article 2 of the UCC governs contracts for sales of goods.

Question 10

To be characterized as a "good" under the UCC,an item of property must be movable.

Question 11

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

Question 12

When an offeror does not specify a means of acceptance,acceptance can be made by any means of communication that is reasonable.

Question 13

The UCC imposes special business standards on casual and inexperienced sellers and buyers.

Question 14

If a contract in which goods and services are combined is primarily a goods contract,any dispute over it will be decided under the UCC.

Question 15

The UCC imposes a good faith limitation on requirements contracts.

Question 16

No oral contract is enforceable under the UCC.

Question 17

If a court deems any clause in a contract to have been unconscionable at the time it was made,the court can limit its application.

Question 18

Certain provisions of UCC Article 2A apply only to consumer leases.

Question 19

UCC Article 2 applies to sales transactions between all buyers and sellers.

Question 20

Under the UCC,a sale is the passing of title from a seller to a buyer for a price payable in cash,goods,or services.

Question 21

Trina pays Urban Edge Electronics store $1,500 for a laptop com?puter.Under the UCC,this is

A)a gift.
B)a lease.
C)a sale.
D)a crime.

Question 22

Cleo sells kitchen appliances to per?sons who come into her store,Buy n' Sell Appliances.One afternoon,Cleo sells a used display shelf to Earline.At a garage sale at her home,Cleo sells a used sofa to Flavia.Under the UCC,Cleo is a merchant of

A)kitchen appliances only.
B)kitchen appliances and display shelves only.
C)kitchen appliances,display shelves,and sofas.
D)none of the choices.

Question 23

Sweet Tooth Pastries,Inc. ,and other bakers refer to a "baker's dozen" as con?sisting of a collection of thirteen baked goods.This is an example of

A)course of dealing.
B)course of performance.
C)square dealing.
D)usage of trade.

Question 24

Over the course of a year,Retail Market,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 Savers 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 25

Fact Pattern 19-A1
Olisa enters into a contract to buy a stove from Pay-to-Own Appliance store with the price to be paid in monthly installments.After thirty-six months of payments,Olisa has paid more than twice the price of a similar stove.Eighteen payments remain due under the contract.
Refer to Fact Pattern 19-A1.Olisa files a suit against Pay-to-Own,claiming that their contract is so unfair and one sided that it would be unreasonable to enforce it.Olisa is asserting

A)the concept of good faith.
B)the principle of fair trade.
C)the predominant-factor test.
D)the doctrine of unconscionability.

Question 26

Sunny Glass Company and Collision Repair Center enter into a contract under which Sunny agrees to deliver a certain quantity of auto glass to Collision Repair each month.The contract does not include a price term.In a suit between the par?ties over the price,a court will

A)determine a reasonable price.
B)impose the lowest market price.
C)impose the highest market price.
D)return the parties to the positions they held before the contract.

Question 27

Valley Farms offers to sell Whole Harvest Bakeries,Inc. ,five hundred bushels of wheat.Whole Harvest responds,"We agree to buy five hundred bushels only if the wheat is Grade A quality." This statement is

A)a breach.
B)a counteroffer.
C)a confirmation.
D)an acceptance.

Question 28

Rio Engineering Corporation pays PC Technologies,Inc. ,$1,000 to use a com?puter for a month.For purposes of the UCC,this is

A)a crime.
B)a consignment.
C)a lease.
D)a sale.

Question 29

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 30

In a dispute over a sale involving a bicycle,Dain argues that as to this deal Emory's Hobby Shop,where Dain bought the bike,is a merchant.A court may determine whether Emory'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 31

Fact Pattern 19-A1
Olisa enters into a contract to buy a stove from Pay-to-Own Appliance store with the price to be paid in monthly installments.After thirty-six months of payments,Olisa has paid more than twice the price of a similar stove.Eighteen payments remain due under the contract.
Refer to Fact Pattern 19-A1.Under the UCC,the court can evaluate the contract to determine whether it was unreasonably unfair and one sided

A)at the time it was made.
B)at the end of its term.
C)in the middle of its performance.
D)at the time of Gail's suit.

Question 32

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 the sale of

A)any of the property evidenced by a writing.
B)any of the property that may involve fraud.
C)the furnishings priced at $500 or more.
D)the land and the building.

Question 33

Overseas Corporation (OC),a U.S.firm,orally agrees to sell six freezers to Pisa Pizza,Ltd. ,in Italy.OC fails to deliver.Under the CISG,Pisa Pizza can

A)enforce the agreement.
B)not enforce the agreement because it is not in writing.
C)not enforce the agreement because the price term is not specified.
D)not enforce the agreement because there is no consideration.

Question 34

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

A)the duration of the deal.
B)a payment term.
C)a quantity term.
D)shipping arrangements.

Question 35

Pressing Music,Inc. ,offers to buy from Digital Media Corporation (DMC)one million blank CDs of a certain quality.Without notifying Pressing,DMC timely ships CDs of a different quality.With respect to the offer and a possible contract,this shipment is

A)an acceptance and a breach.
B)an acceptance and an accommodation.
C)an acceptance and complete performance.
D)a rejection and a counteroffer.

Question 36

Pop Culture Clothiers,Inc. ,sells t-shirts to Trendwell Stores,Inc. ,under an existing con?tract.When textile costs increase,Trendwell agrees to a price increase,but later wants to cancel the con?tract.Trendwell 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 37

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 38

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 39

Omni Corporation is a Pennsylvania-based firm that does business throughout the United States.With respect to this circumstance,the UCC has been adopted by,and applies in,

A)a few of the states.
B)all of the states,in whole or in part.
C)half of the states.
D)none of the states,to date.

Question 40

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 11 of the CISG.
D)the common law only.

Question 41

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 42

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.