Deck 14: The Formation of Sales and Lease Contracts

Question 1

A sale of growing crops is a sale of goods.

Answer 1

True

Question 2

Article 2A applies only to consumer leases.

Answer 2

False

Question 3

If a contract for a sale of goods does not include a price term,there is no ba?sis for enforcing it.

Answer 3

False

Question 4

The UCC governs sales of goods.

Question 5

The UCC governs sales of services.

Question 6

If a seller is to remove a structure attached to land,the sale of the structure is treated as one involving goods as opposed to realty.

Question 7

According to the UCC,one or more open terms will always cause a sales or lease contract to fail for indefiniteness.

Question 8

If a contract for a sale of goods does not include the terms for payment,there is no basis for enforcing it.

Question 9

A contract for the sale of stock is subject to Article 2.

Question 10

Under the UCC,a merchant who sells one type of good will be considered a merchant for any other type of good that he or she may sell.

Question 11

In a contract in which goods and services are combined,the contract is al?ways considered an agreement for the sale of goods.

Question 12

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

Question 13

Article 2A covers leases,but not subleases,of goods.

Question 14

A lease agreement is the lessor and lessee's bargain.

Question 15

Under the UCC,a sale occurs when title passes from a seller to a buyer for a price.

Question 16

Under the UCC,a sale of goods will be considered valid only if the goods are paid for with money.

Question 17

A contract for the sale of a copyright is subject to Article 2.

Question 18

A lessor is one who sells the right to the possession and use of goods un?der a lease.

Question 19

A sale of a fixture is always considered a sale of realty.

Question 20

The UCC does not impose different standards on merchants than it im?poses on consumers.

Question 21

An oral contract may be enforceable under the UCC.

Question 22

Two parties' course of dealing may be considered to resolve an ambiguity in a contract between them.

Question 23

Under the UCC,an offer to buy goods can be accepted only by a prompt shipment of the goods.

Question 24

Bonsai Diner,which is moving to a new location,sells its used tables and chairs to Café Furnishings Corporation.For purposes of the UCC,this is

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

Question 25

In effect,the United Nations Convention on Contracts for the International Sale of Goods requires that the terms of the acceptance mirror those of the offer.

Question 26

Under the mirror image rule,an offer must be accepted in its entirety with?out modification or reservation,or no contract is formed.

Question 27

If a contract for a sale of goods does not include the delivery date,there is no basis for enforcing it.

Question 28

Omega Systems,Inc. ,contracts with Petro Oil Corporation to make special pipe and install it in Petro's refinery.There is no separate price in the con?tract for the installation.Most likely,a court would consider this con?tract

A)equally for a sale of goods and a sale of services.
B)neither for a sale of goods nor a sale of services.
C)predominantly for a sale of goods.
D)predominantly for a sale of services.

Question 29

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

Question 30

If a contract for a sale of goods does not include the quantity,it may still be enforced if it is a requirements contract.

Question 31

In a dispute over a sales contract involving skis,Dave argues that as to this deal,Elle is a merchant.A court may determine whether Elle is a merchant by assessing whether she

A)enjoys skiing.
B)has sold any skis within the last year.
C)holds herself out by occupation as having knowledge or skill unique to the skis in the transaction.
D)subscribes to Skis,a biweekly trade magazine.

Question 32

If a nonmerchant's offer expressly conditions acceptance on a nonmer?chant's agreement to the terms of the offer,a positive response may consti?tute an acceptance even if it contains additional terms.

Question 33

Under the UCC,an agreement modifying a contract needs new considera?tion to be binding.

Question 34

An oral contract for specially manufactured goods is not enforceable under the UCC.

Question 35

The UCC imposes a good faith limitation on output contracts.

Question 36

If a sales contract is unilateral,the offeror need not be notified of the of?feree's performance.

Question 37

Saf-Tee Chemical Company agrees to sell a storage tank on its premises to Toxic Processing,Inc.The tank can be removed by disconnecting a pipe.This deal is governed by

A)neither real property law nor the UCC.
B)real property law and the UCC.
C)real property law only.
D)the UCC only.

Question 38

The rules governing firm offers apply to certain merchants only.

Question 39

When an offer does not specify a means of acceptance,it can be accepted by any means reasonable under the circumstances.

Question 40

Suzy pays Triple-A Office Supply Company $1,500 for a new laptop com?puter.According to the UCC,this is

A)a gift.
B)a lease.
C)a sale.
D)not a gift,a lease,or a sale.

Question 41

Best Truck Company contracts to sell six trucks to Commercial Transport,Inc. ,which contracts to lease the trucks to Distributors Corporation.Article 2A of the UCC applies to

A)neither the lease nor the sale.
B)the lease and the sale.
C)the lease only.
D)the sale only.

Question 42

Standard Office Corporation pays Tech Products $100 to use a Tech com?puter for a month.For purposes of the UCC,this is

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

Question 43

NuTech Company agrees to sell computer equipment to Office Stores,Inc.(OSI)for OSI to market to its customers.Their contract will be unenforce?able if it does not include

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 44

Nugget's Chick'n Shack orders chicken from Outlet Food Supplier,but Outlet does not deliver.Nugget'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 45

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

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

Question 46

Chas and Dodie sign a contract for a sale of goods.Chas is to set the price for the goods at the time of delivery,but on delivery,refuses to do so.Dody may only

A)fix a reasonable price.
B)fix a reasonable price or treat the contract as canceled.
C)treat the contract as canceled.
D)wait for Chas to set the price.

Question 47

Doctors Clinic orders 1,000 bandages from Emergency Supplies Company but fails to specify the sizes.The bandages are delivered in an assortment of sizes.Doctors Clinic may

A)accept the bandages "as is" only.
B)accept the bandages "as is" or reject the entire shipment only.
C)accept only the bandages that it wants and reject the rest.
D)reject the entire shipment only.

Question 48

Giles and Hubie enter into a sales contract.With respect to the specific con?tractual provisions set out in the UCC,Giles and Hubie 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 49

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 50

Grade-A Construction Corporation offers to buy from Harden Cement Company a certain quantity of cement for a certain price.Harden can accept 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 51

Regional Products,Inc. ,agrees to sell to Quantity Dealers Corporation a certain amount of goods 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 UCC-designated warehouse.
C)Regional's place of business.
D)Quantity's place of business.

Question 52

US Products Company and Vital Manufacturing,Inc. ,enter into a contract for the sale of a certain quantity of machine parts.The UCC reads into this contract is the concept of

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

Question 53

Better Sales,Inc. ,is the offeror and City Goods Corporation is the offeree un?der a unilateral sales contract in which Design Products Company is also interested.Better is not notified of City's performance within a reasonable time.Better

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

Question 54

Metro Daily and New City Newsstand enter into a contract under which Metro agrees to deliver a certain quantity of newspapers to New City each day.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)refuse to enforce the agreement.
D)return the parties to the positions they held before the contract.

Question 55

USA Farms offers to sell Valu Bakeries,Inc. ,fifty bushels of wheat.Valu's representative Wendy responds,"We agree to buy fifty bushels only if the wheat is Grade A quality." Wendy's statement is

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

Question 56

Variety Goods,Inc. ,and Worldly Sales Corporation enter into a contract that does not specify the payment terms.Payment may be made in

A)any commercially acceptable means except cash.
B)cash only.
C)cash or any commercially acceptable substitute.
D)cash or check only.

Question 57

Magna Motors,Inc. ,sells the right to the possession and use of a motor vehi?cle under a lease.As defined in the UCC,Magna is

A)a bailor.
B)a dealer.
C)a lessor.
D)a seller.

Question 58

Trendee Clothiers,Inc. ,sells t-shirts to U-Pik-It Stores,Inc. ,under an existing con?tract.When textile costs increase,U-Pik-It agrees to a price in?crease,but later wants to cancel the con?tract.U-Pik-It 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 59

Centrex Computer Company offers to sell Deluxe Vehicle Sales Corporation 1,000 computers for a $500,000,states that the offer will be open for six days,and asks for a response by fax.On the fourth day,Deluxe sends an acceptance to Centrex via the mail,which is received on the sixth day.In this deal

A)a contract is formed.
B)no contract is formed,because Centrex asked for a response by fax.
C)no contract is formed,because Centrex received the acceptance late.
D)no contract is formed,because Deluxe sent the acceptance late.

Question 60

Packaging Products,Inc. ,sends its standard purchase-order form to Quality Box Company to evidence a sale of packaging material.Quality re?sponds with its own standard order form.Additional terms in Quality's form automatically become part of the contract unless

A)Packaging objects to the new terms within a reasonable time.
B)Packaging's form expressly required acceptance of its terms.
C)the additional terms materially alter the original contract.
D)any of the choices.

Question 61

Rita,the manager of the State University (SU)soccer team,orally agrees to lease a certain number of specially made SU banners from Top Flite Banners,Inc.This lease is enforceable only if Top Flite has made a substantial 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 Flite's business.
D)the soccer season has not ended and SU goes to the finals.

Question 62

Overseas Corporation,an American firm,orally agrees to sell six large freezers to Pisa Pizza,Ltd. ,in Italy.Overseas 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 63

Equipt Rental Corporation and Family Custodial Service,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 64

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.

Question 65

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

A)refuse to enforce the contract,enforce the contract without the disputed clause,or limit the application of 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 66

Kelly offers to buy 1,000 gallons of oil from Jim for fifty cents per gallon.Jim believes Kelly offers $1 per gallon and orally agrees to the sale.When the parties later dispute the price in court,Jim's claim of $1 and Kelly's tes?timony that she offered fifty cents

A)supports an enforceable contract for a price of $1 per gallon.
B)supports an enforceable contract for a price of seventy-five cents per gallon.
C)supports an enforceable contract for a price of fifty cents per gallon.
D)prevents the enforcement of any contract between these parties.

Question 67

Donna orally agrees to sell a tool shed to Erv for $450.Donna removes the shed from her property and takes it to Erv's place.When Erv does not pay,Donna sues.Erv claims that the sale of the shed was an oral con?tract that is not enforceable under the Statute of Frauds.What is the court likely to conclude?

Question 68

Recreation Supplies,Inc.(RSI),and Sam,the owner of Tourist Time Shop,orally agree to a sale of beach balls and seashells for $1,000.Sam gives RSI a check for $400 as a partial payment.This contract is

A)enforceable to the extent of $400.
B)fully enforceable because it is for specially made goods.
C)fully enforceable because it is oral.
D)not enforceable.

Question 69

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 70

Tasty Pastries,Inc. ,and other bakers refer to a "baker's dozen" as consist?ing 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 71

Gulp Beverages Company (GBC)often sells coffee,tea,and related prod?ucts to Hava Java,Inc.(HJI),which owns and operates a chain of coffee shops.Over the phone,representatives of the two firms negotiate a sale of 144 pounds of a certain kind of coffee bean.GBC sends a letter to HJI de?tailing the terms and ten days later ships the beans.Is there an enforce?able con?tract between them? Explain.

Question 72

In Case 14.3,Jones v.Star Credit Corp. ,the factor that was not considered by the court when it declared a contract for the pur?chase of a freezer unconscionable is that

A)the price the plaintiffs were charged was more than four times the freezer's retail value.
B)the credit charges alone exceeded the freezer's retail value.
C)the seller knew of the buyers' limited resources.
D)the freezer was not merchantable.