Question 1

Is Aranda correct that full payment should be made at the time of delivery?

Accepted Answer

Under the Uniform Commercial Code (UCC), when the terms of payment are not specified in a contract for the sale of goods, payment is due at the time and place at which the buyer is to receive the goods. This is because the UCC fills in gaps in commercial contracts with default provisions to facilitate commerce.

Question 2

Aranda claims that Rita's telephone call with Aranda is an admission of the existence of the contract and an admission constitutes an exception to the statute of frauds under the UCC. Is Aranda correct?

Accepted Answer

An admission can be an exception to the statute of frauds under the UCC, but it typically needs to be in a form that can be verified, such as in pleadings, testimony, or otherwise in court, not merely over a telephone call.

Question 3

[Cookware Crisis] Aranda owns Aranda's Cooking, a cooking supply company which sells high quality cookware to restaurants and specialty stores. Aranda stopped at a potential customer, Rita's Restaurant, to show Rita a new, elite line of copper cookware, bakeware, and utensils. Rita told Aranda she wanted to buy the entire cookware line for the stated price of $5,000, but needed time to think about the other items. The following day, Rita called Aranda and told her to add the line of bakeware Rita had quoted for $5,000 and the line of utensils. The next week, Aranda delivered the entire cookware line, and said she would return the next day to drop off the bakeware and utensils and pick up a check for $12,000 which included $5,000 for the bakeware and $2,000 for the utensils. Rita was outraged at the price of the utensils and told Aranda not to deliver the utensils because there was no agreement about them. Aranda tells Rita that she agreed to buy the utensils and there is a valid contract, and that she expects full payment when she returns the next day. Rita responds that the addition of the utensils was only a counteroffer, which was not accepted by Rita and there is nothing in writing, and therefore there is no contract. Aranda delivers the bakeware and utensils the following day.
-Is Rita correct that there is no contract because there is nothing at all in writing?

Accepted Answer

The Uniform Commercial Code (UCC) allows for the enforcement of contracts based on partial performance, even in the absence of a written agreement, when the goods have been delivered and accepted.

Question 4

[Cookware Crisis] Aranda owns Aranda's Cooking, a cooking supply company which sells high quality cookware to restaurants and specialty stores. Aranda stopped at a potential customer, Rita's Restaurant, to show Rita a new, elite line of copper cookware, bakeware, and utensils. Rita told Aranda she wanted to buy the entire cookware line for the stated price of $5,000, but needed time to think about the other items. The following day, Rita called Aranda and told her to add the line of bakeware Rita had quoted for $5,000 and the line of utensils. The next week, Aranda delivered the entire cookware line, and said she would return the next day to drop off the bakeware and utensils and pick up a check for $12,000 which included $5,000 for the bakeware and $2,000 for the utensils. Rita was outraged at the price of the utensils and told Aranda not to deliver the utensils because there was no agreement about them. Aranda tells Rita that she agreed to buy the utensils and there is a valid contract, and that she expects full payment when she returns the next day. Rita responds that the addition of the utensils was only a counteroffer, which was not accepted by Rita and there is nothing in writing, and therefore there is no contract. Aranda delivers the bakeware and utensils the following day.
-Is Rita correct that her statement to add the utensils did not constitute acceptance?

Accepted Answer

Rita's statement to add the utensils without expressly conditioning her acceptance on Aranda's assent to the additional terms does not constitute a formal acceptance under contract law principles, indicating there was no mutual agreement on the added items.

Question 5

According to Exhibit 21-6 of the text, which of the following statements about material terms under the UCC and the common law is true?

Accepted Answer

Under common law, contracts require all material terms to be specified to be enforceable, ensuring clarity and mutual understanding of the agreement. However, the Uniform Commercial Code (UCC), which governs sales of goods, allows for greater flexibility by permitting some material terms, like price, to be determined at a later date, recognizing the dynamic nature of commercial transactions.

Question 6

Under the UCC, when will additional terms negate acceptance of a sales contract?

Accepted Answer

Under the Uniform Commercial Code (UCC), additional terms in an acceptance do not automatically negate the acceptance of a sales contract. However, if the acceptance is expressly made conditional on the offeror's assent to the additional terms, then it can negate acceptance. This is because the acceptance is not unconditional; it depends on the offeror agreeing to the new terms, effectively making it a counteroffer rather than a clear acceptance.

Question 7

After conducting a great deal of research, Nora contacts a camping store and signs a contract to purchase forty-five new tents at a reduced rate. According to Exhibit 21-4 of the text, under what circumstances would Nora not be considered a "merchant" under UCC Article 2 with regard to the contract for the purchase of the tents?

Accepted Answer

Nora would not be considered a "merchant" under UCC Article 2 if she purchased the tents for personal use, such as for use at a summer camp she manages, rather than for resale or business purposes related to selling tents.

Question 8

According to Exhibit 21-5 in the text, which terms can be interpreted by the UCC if left open in a contract?

Accepted Answer

The Uniform Commercial Code (UCC) allows for the interpretation of open terms in a contract, including price, payment, delivery, time, and duration, to facilitate the enforcement of contracts even when not all terms are explicitly stated.

Question 9

[Lucky Morton] Morton, who owns 500 acres of land in east Texas, has just discovered oil under his property. He calls OilEx, who wants to buy all of the oil from Morton's property. Morton is thrilled about the money he will make from selling the oil and he signs a contract allowing OilEx to set up a drilling station on his property. Thinking he can get more money off his land, Morton cuts down all of his trees with a chainsaw and then sells them to PaperCo to be made into paper. Meanwhile, Morton's neighbor offers to buy Morton's wheat crop after it is harvested in the Fall, and Morton agrees.
-Is Morton's contract with OilEx likely covered by the UCC?

Accepted Answer

The Uniform Commercial Code (UCC) generally covers transactions involving the sale of goods, but when a contract primarily involves the sale of real property or the granting of rights to extract minerals or other natural resources from the land, it is not considered a sale of goods. In Morton's case, the contract with OilEx grants the company the right to enter his property and extract oil, which is a right related to real property, not a sale of goods covered by the UCC.

Question 10

What was the court's ruling in Loizeaux Builders Supply Co. v. Donald B. Ludwig Company, the case in the text about whether a supplier's telephone call in February that the low price for concrete "would be adhered to for the year" still applied after January 1, when the supplier raised its price?

Accepted Answer

The court ruled in favor of the supplier, emphasizing the plain meaning of "adhered to for the year," industry practices regarding price adjustments, and the buyer's awareness of the price increase.

Question 11

Which of the following statements is true about the UCC and the CISG?

Accepted Answer

The CISG (United Nations Convention on Contracts for the International Sale of Goods) has more lenient requirements for the statute of frauds than the UCC (Uniform Commercial Code), often not requiring a written contract for the sale of goods to be enforceable, unlike the UCC which generally requires a writing for sales of goods valued at $500 or more.

Question 12

Which of the following items would not be considered a "good" under the UCC?

Accepted Answer

Under the Uniform Commercial Code (UCC), a "good" is defined as all things that are movable at the time of identification to the contract for sale. The copyright of a best-selling novel is not considered a "good" because it is an intangible property right, not a movable item.

Question 13

What are the UCC's exceptions to the statute of fraud's writing requirements?

Accepted Answer

The UCC allows exceptions to the statute of frauds for specifically manufactured goods, admission in court that a contract for sale was made, and partial performance of the contract. These exceptions enable enforcement of contracts that might not meet the traditional writing requirements under certain conditions.

Question 14

According to Exhibit 21-5 in the text, if quantity is left open in a contract for the sale of goods under the UCC, how will a court most likely interpret this provision?

Accepted Answer

Under the UCC, if a contract for the sale of goods leaves the quantity open, the court generally has no basis for determining a remedy because quantity is a critical term that must be specified for the contract to be enforceable.

Question 15

Are there any steps Emilia should take in small claims court, or before she goes, regarding the customer who ordered the plain T-shirts?

Accepted Answer

Before going to court, it's beneficial for Emilia to gather as much evidence as possible to support her case. Getting the customer to admit that they ordered the T-shirts can be a crucial piece of evidence in small claims court, where the formal rules of evidence are often more relaxed than in higher courts. This admission can help establish that there was an agreement between Emilia and the customer, which is central to proving her case.

Question 16

[Lucky Morton] Morton, who owns 500 acres of land in east Texas, has just discovered oil under his property. He calls OilEx, who wants to buy all of the oil from Morton's property. Morton is thrilled about the money he will make from selling the oil and he signs a contract allowing OilEx to set up a drilling station on his property. Thinking he can get more money off his land, Morton cuts down all of his trees with a chainsaw and then sells them to PaperCo to be made into paper. Meanwhile, Morton's neighbor offers to buy Morton's wheat crop after it is harvested in the Fall, and Morton agrees.
-Is Morton's contract for Winslow to purchase his wheat crop covered by the UCC?

Accepted Answer

The Uniform Commercial Code (UCC) covers transactions involving the sale of goods, and crops that are sold while still growing are considered goods under the UCC. This means that Morton's contract for the sale of his wheat crop is covered by the UCC.

Question 17

Which of the following statements is true about the Uniform Commercial Information Transactions Act (UCITA)?

Accepted Answer

The answer of Which of the following statements is true...

Question 18

[Lucky Morton] Morton, who owns 500 acres of land in east Texas, has just discovered oil under his property. He calls OilEx, who wants to buy all of the oil from Morton's property. Morton is thrilled about the money he will make from selling the oil and he signs a contract allowing OilEx to set up a drilling station on his property. Thinking he can get more money off his land, Morton cuts down all of his trees with a chainsaw and then sells them to PaperCo to be made into paper. Meanwhile, Morton's neighbor offers to buy Morton's wheat crop after it is harvested in the Fall, and Morton agrees.
-Is Morton's contract for PaperCo to purchase his trees covered by the UCC?

Accepted Answer

The Uniform Commercial Code (UCC) applies to the sale of goods, and once Morton cut down the trees, they became goods rather than part of the real estate. Therefore, the contract for PaperCo to purchase the trees is covered by the UCC.

Question 19

For businesses that operate in the global economy, ________ clauses would be advantageous to include in a contract in order to avoid conflict.

Accepted Answer

Choice-of-language, forum-selection, and choice-of-law clauses are all advantageous for businesses operating in the global economy. These clauses help in avoiding conflicts by clearly defining the language to be used in legal documents, the jurisdiction that will handle any disputes, and the law that will govern the contract.

Question 20

Which of the following statements is true regarding merchants under the UCC?

Accepted Answer

The UCC differentiates between merchants and nonmerchants in various aspects, imposing a higher standard of care and behavior on merchants due to their expertise and knowledge in their respective fields.

Quiz 21: Introduction to Sales and Lease Contracts