Question 1

Article 2A of the UCC, approved by drafters of the Code in 1987 and amended in 1990, deals with leases of personal property, which exceed $100 billion annually.

Accepted Answer

Article 2A of the UCC does deal with leases of personal property and the amount involved annually is stated to exceed $100 billion.

Question 2

Consumer leases are treated no differently than business leases under the UCC.

Accepted Answer

Consumer leases are treated differently than business leases under the UCC. The UCC contains special provisions regarding consumer leases, including disclosure requirements, default and termination rights, and limitations on the lessor's remedies.

Question 3

Until the early 1900s, sales transactions were completely governed by general contract law, but now sales of tangible personal property are predominantly governed by statute.

Accepted Answer

The Uniform Commercial Code (UCC) was established in the early 1900s and is now the predominant law governing sales of tangible personal property in the United States. It is a statutory law, as opposed to general contract law.

Question 4

The firm offer provision in Articles 2 and 2A of the UCC covers only merchant sellers.

Accepted Answer

The answer of The firm offer provision in Articles 2...

Question 5

The Code provides that its remedies shall be liberally administered to place the aggrieved party in a position as good as the one she would have occupied had the defaulting party fully performed.

Accepted Answer

The Code does provide that its remedies will be liberally administered to put the aggrieved party in a position as good as the one she would have occupied had the defaulting party fully performed. This is stated in Article 1.304 of the Code.

Question 6

"Acceptance" under the UCC always means taking possession of goods.

Accepted Answer

"Acceptance" under the UCC refers to the act of a buyer indicating that they intend to keep and pay for goods, usually after inspecting them. Acceptance can occur before or after possession of the goods is taken.

Question 7

Unless an auction is advertised or announced as being without reserve, the sale is with reserve, and the auctioneer may withdraw the goods at any time until he announces completion of the sale.

Accepted Answer

This statement is true. Unless an auction explicitly states that it is without reserve, it is assumed to be with reserve, meaning the auctioneer can withdraw goods at any time before announcing the completion of the sale.

Question 8

If a merchant makes a written offer to buy or sell goods, this will be irrevocable only if accompanied by consideration.

Accepted Answer

The answer of If a merchant makes a written offer...

Question 9

The Uniform Electronic Transactions Act, in effect in all of the states, covers contracts not governed by Articles 2 and 2A.

Accepted Answer

The Uniform Electronic Transactions Act (UETA) does apply to electronic records and signatures relating to a transaction, but it does not specifically exclude contracts governed by Articles 2 (Sales) and 2A (Leases) of the Uniform Commercial Code (UCC). The UETA generally applies broadly to electronic transactions but does not make distinctions based on the type of contract or the UCC articles that might govern those contracts.

Question 10

Sales contracts containing unconscionable clauses are void and unenforceable.

Accepted Answer

The answer of Sales contracts containing unconscionable clauses are void...

Question 11

A finance lease is a special type of lease transaction that generally involves three parties instead of two.

Accepted Answer

A finance lease involves the lessee, lessor, and a third-party financier who provides the funds for the lease transaction.

Question 12

If a UCC contract does not contain all the terms necessary to carry it out, there will be no contract.

Accepted Answer

According to UCC Section 2-204, a contract for the sale of goods may be made "in any manner sufficient to show agreement, including conduct by both parties which recognizes the existence of such a contract." This means that even if all the necessary terms are not explicitly spelled out in the contract, a contract can still be formed if the parties' actions demonstrate their mutual agreement to the essential terms. However, the missing terms will be filled in by UCC default rules or by industry standards if they exist.

Question 13

The UCC treats merchants more leniently than others in transactions involving goods.

Accepted Answer

The UCC often holds merchants to higher standards than non-merchants because merchants are considered to have more knowledge and expertise in commercial transactions involving goods.

Question 14

Most of the Code's provisions are not mandatory but allow the parties to vary or displace them by agreement.

Accepted Answer

The UCC provides default rules that can be overridden by the parties' agreement.

Question 15

The general law of contracts is displaced by the Code in all aspects of the sale of goods.

Accepted Answer

The answer of The general law of contracts is displaced...

Question 16

Leslie, the owner of a shoe store, purchased 500 Model XT-50 running shoes from her supplier, but price was not stated in the contract. The contract is voidable at Leslie's option until the parties agree on a price.

Accepted Answer

The answer of Leslie, the owner of a shoe store,...

Question 17

Andrew has a contract to buy 100 tables from Bartholomew at a price of $50 a table. Five days before Bartholomew is to deliver the tables, he tells Andrew that he is sorry, but $50 won't cover his costs; he will need at least $75 a table. Andrew agrees, because he needs the tables for his special sale. The modified contract is enforceable without new consideration, so long as Bartholomew is acting in good faith.

Accepted Answer

This statement is true. The modification of a contract can be enforceable without new consideration as long as both parties agree to the modification and it is done in good faith. In this case, Bartholomew informed Andrew of his need for a higher price in advance and Andrew agreed to it, making it a valid modification to the original contract.

Question 18

A court faced with an unconscionable lease contract may refuse to enforce the entire contract.

Accepted Answer

If a lease contract is found to be unconscionable, a court may refuse to enforce the entire contract or may strike down only the unconscionable clauses while allowing the remainder of the contract to remain in effect. However, each state's laws regarding unconscionability may vary, so it is important to consult with a local attorney for specific guidance.

Question 19

In a contract to sell goods, the sale does not take place until the seller transfers the title to the goods to the buyer.

Accepted Answer

In a contract to sell goods, the seller must transfer the title to the goods to the buyer for the sale to be considered complete. Until the title is transferred, the goods remain the property of the seller.

Question 20

If a seller buries important terms of its sales agreement in fine print, this could constitute procedural unconscionability, which could result in a court's refusal to enforce the entire sales contract or at least the part the court finds unconscionable.

Accepted Answer

Procedural unconscionability refers to unfair, deceptive, or unconscionable practices used by a party during the contract negotiation or formation process, such as burying important terms in fine print. This could lead to a court refusing to enforce the entire contract or just the unconscionable terms.

Quiz 21: Introduction to Sales and Leases