Question 1

A contract between Fruit of the Valley Corporation and Green Grocer,Inc. ,requires Fruit to deliver goods to Green's place of business.This is​

Accepted Answer

A destination contract specifies the seller's responsibility for delivery of goods to a specific destination, in this case, Green's place of business. A bill of lading is a document that provides evidence of receipt of the goods by the carrier for shipment. A shipment contract is one in which the seller's responsibility ends when the goods are loaded onto a carrier, and a warehouse receipt is a document acknowledging receipt of goods into a warehouse for storage.

Question 2

Talk,Inc. ,offers to buy from Ultra Corporation 1,000 phones.Without notifying Talk,Ultra timely ships phones of a different quality.With respect to the offer and a possible contract,this shipment is an acceptance and​

Accepted Answer

The shipment of phones of a different quality than what was offered by Talk, Inc. without notifying them is an acceptance of the offer by Ultra Corporation. However, since the shipped phones are of a different quality, this is a breach of contract.

Question 3

Roofing Company buys asphalt tiles from Shingles,Inc.The parties agree that the tile will be shipped "F.O.B.Shingles warehouse" to Roofing's location via Shipping Corporation.The tiles are lost in transit.The loss is suffered by​

Accepted Answer

F.O.B. (Free on Board) means that the seller, Shingles,Inc., is responsible for the goods until they are loaded onto the carrier (Shipping Corporation), but once the carrier takes possession of the goods, the responsibility for any loss or damage is transferred to the buyer, Roofing Company. Therefore, Roofing Company is the party that suffers the loss of the tiles in transit.

Question 4

Dian,an agent for Expo Motors,Inc. ,writes a letter to Flynn on November 1 stating that she will sell him a 217 Subaru Outback for $25,000 between November 1 and December 31.Dian's letter to Flynn is​

Accepted Answer

According to the UCC, a merchant's firm offer is a binding offer made by a merchant to buy or sell goods in a signed writing that assures the offer will be held open. In this case, Dian, an agent for Expo Motors, Inc., has made a firm offer to sell Flynn a 2017 Subaru Outback for $25,000 between November 1 and December 31. As a merchant, Dian's offer is binding, and it assures Flynn that he can purchase the car during the specified time frame at the agreed-upon price. Therefore, choice A is correct.

Question 5

Global Outfitters Outlet and Holly,a consumer,enter into a contract for a sale of camping gear.If the contract includes a clause that is perceived as grossly unfair to Holly,its enforcement may be challenged under​

Accepted Answer

The doctrine of unconscionability allows a court to refuse to enforce a contract on the grounds that it is so one-sided and unfair that it is oppressive to one party. If the clause in the contract is perceived as grossly unfair to Holly, she may challenge its enforcement under this doctrine.

Question 6

Confections Corporation orders Delicious-brand Chocolate Bars from Edibles Company.Edibles identifies the goods.Before they are shipped,an insurable interest in the goods exists in​

Accepted Answer

Both Confections and Edibles have an insurable interest in the goods. Edibles has an interest because they own the goods until they are shipped, and Confections has an interest because they have identified and contracted to purchase the goods.

Question 7

Fresh Milk,Inc. ,is the offeror and Guernsey Dairy Farm is the offeree under a unilateral sales contract.Fresh is not notified of Guernsey's performance within a reasonable time.Fresh​

Accepted Answer

When an offeror does not receive notification of the offeree's performance within a reasonable time, the offer is considered to have lapsed. Therefore, Fresh Milk, Inc. may treat the offer as having lapsed.

Question 8

Pine Mills Inc.and Quality Lumber Company enter into a contract for a sale of plywood to be delivered under a destination contract.This contract requires Pine Mills,the seller,to​

Accepted Answer

In a destination contract, the seller is responsible for delivering the goods to a specific destination, which is usually the buyer's place of business or a particular agreed-upon location. Therefore, the seller in this contract (Pine Mills Inc.) is required to deliver the plywood to the specified destination. The other options are not necessarily required in a destination contract.

Question 9

Pavers Inc.contracts to buy some heavy equipment from Earthmovers,Inc.Before either party performs,Earthmovers sells its assets to Excavation Corporation.On learning of the sale,Pavers is concerned about its contract with Earthmovers.Pavers should​

Accepted Answer

Pavers should demand assurances of performance from the seller, which is now Excavation Corporation. This will ensure that Excavation will still fulfill the terms of the contract that was originally made with Earthmovers. Simply suing the seller for breach or buying the equipment from a different firm and billing the seller or Excavation may not be necessary if assurances of performance can be obtained.

Question 10

ABC Toy Store orders one hundred board games from Big Board Games Inc.When the games are delivered,they are all missing pieces.ABC rejects the shipment.To cure,Big Board must​

Accepted Answer

Promptly notifying ABC of the intent to cure is the appropriate action for Big Board to take. This allows them to either replace the missing pieces or provide a new shipment of games that are complete. This helps to preserve the business relationship between the two companies and ensures that ABC receives the goods they ordered. The other options (B, C, and D) are not necessary or appropriate in this situation.

Question 11

Minerals Ltd.contracts to provide several manufacturers with tin.When a cartel of tin-producing countries suddenly embargoes future shipments of tin to Minerals so that it cannot fulfill its contracts,the distributor​

Accepted Answer

The distributor is excused from the performance of its contracts due to the unexpected embargo by the cartel, which is considered an act of God or force majeure event. The distributor cannot be held liable for the breach of contract as the situation was beyond their control. However, if the distributor can substitute some other material for the tin, then they can do so, but it would depend on the terms of the contract and the consent of the manufacturers.

Question 12

Quest Outdoor Store orders RiverRun-brand kayaks from Sports Merchandise,Inc.Sports Merchandise mistakenly ships kayaks of the wrong size,which Quest rejects and returns via Trans-State Shipping Company.During the return,the kayaks are lost.The loss is suffered by​

Accepted Answer

The answer of Quest Outdoor Store orders RiverRun-brand kayaks from...

Question 13

Elegant Carpets,Inc. ,and Fantastic Floors Stores enter into a contract for a sale of carpeting to be delivered under a shipment contract.This contract requires Elegant Carpets,the seller,to​

Accepted Answer

The contract states that it is a shipment contract, which means the seller is only responsible for placing the goods into the hands of a carrier. The buyer is responsible for any damages or losses that occur during transit. Therefore, choice D is the correct answer. Choices A, B, and C are not applicable to this type of contract.

Question 14

Business Rental Corporation (BRC)and Cartage Trucking Company enter into a contract for a lease of ten hydraulic lifts.Under the perfect tender rule,BRC must ship or tender goods to the lessee that​

Accepted Answer

Under the perfect tender rule, the seller must deliver goods that conform to the contract description in every way, without any defects or discrepancies. Any deviation from the agreed-upon specifications could give rise to a breach of contract claim from the buyer. Therefore, option C is the only choice that reflects the standard set by the perfect tender rule.

Question 15

Household Products Corporation sells Ideal-brand vacuum cleaners to Jolly Discount Stores and other retailers.Household will have an insurable interest in the cleaners as long as​

Accepted Answer

Household will have an insurable interest in the vacuum cleaners as long as they retain title to the goods. Insurable interest means that the party purchasing insurance must have a financial interest in the property being insured, and retaining title to the goods gives Household this financial interest. The other options are not relevant to whether or not Household has an insurable interest.

Question 16

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 covers​

Accepted Answer

The UCC Statute of Frauds applies to the sale of goods priced at $500 or more, which would include the furnishings. The sale of land and buildings is covered by the common law Statute of Frauds, not the UCC.

Question 17

Equipment Rentals Corporation (ERC)agrees to lease two backhoes to Dig & Fill Construction,Inc.Before any interest in the backhoes can pass from ERC to Dig & Fill,they must be​

Accepted Answer

The backhoes must be in existence and identified as the goods in the contract before any interest can pass from ERC to Dig & Fill. This means that the backhoes must actually exist and be specifically designated in the terms of the lease agreement before Dig & Fill can take possession or control of them.

Question 18

Clean Mouth Clinic offers to buy from Dental Supplies Company a certain quantity of floss and other items for a certain price.Dental can accept the offer by​

Accepted Answer

Dental can accept the offer by either promising to ship the goods or actually shipping them promptly. The other options either involve altering the terms or providing nonconforming goods, which would not be valid forms of acceptance.

Question 19

Swift Trucking,Inc. ,and Trailer Rents Corporation are parties to an oral agreement for a one-year lease of six doublewides with payments totaling more than $40,000.They may satisfy the Statute of Frauds by​

Accepted Answer

The best choice to satisfy the Statute of Frauds is to set out the terms in a memo. An oral agreement for a one-year lease of six doublewides with payments totaling more than $40,000 falls under the Statute of Frauds, which requires certain contracts to be in writing. A memo, email, or other written document signed by both parties can satisfy the requirements of the Statute of Frauds. Mutually agreeing not to commit fraud or shaking hands on the deal do not satisfy the Statute of Frauds, and repeating the terms in a phone call may not provide sufficient evidence of the contract's terms.

Question 20

Pipes & Culverts Company orders six irrigation pumps from Quality Plumbing,Inc.The pumps are stored in Restorers Warehouse.Under the terms of the order,Quality must give Pipes & Culverts a warehouse receipt for the goods,which the buyer will then pick up.Title to the goods passes to Pipes & Culverts when​

Accepted Answer

Title to the goods passes from Quality to Pipes & Culverts when Quality gives Pipes & Culverts a warehouse receipt for the pumps. This indicates that the goods are ready for pick up by the buyer and ownership is transferred at that point.

Quiz 14: Sales and Lease Contracts

A contract between Fruit of the Valley Corporation and Green Grocer,Inc. ,requires Fruit to deliver goods to Green's place of business.This is

Talk,Inc. ,offers to buy from Ultra Corporation 1,000 phones.Without notifying Talk,Ultra timely ships phones of a different quality.With respect to the offer and a possible contract,this shipment is an acceptance and

Roofing Company buys asphalt tiles from Shingles,Inc.The parties agree that the tile will be shipped "F.O.B.Shingles warehouse" to Roofing's location via Shipping Corporation.The tiles are lost in transit.The loss is suffered by

Dian,an agent for Expo Motors,Inc. ,writes a letter to Flynn on November 1 stating that she will sell him a 217 Subaru Outback for $25,000 between November 1 and December 31.Dian's letter to Flynn is

Global Outfitters Outlet and Holly,a consumer,enter into a contract for a sale of camping gear.If the contract includes a clause that is perceived as grossly unfair to Holly,its enforcement may be challenged under

Confections Corporation orders Delicious-brand Chocolate Bars from Edibles Company.Edibles identifies the goods.Before they are shipped,an insurable interest in the goods exists in

Fresh Milk,Inc. ,is the offeror and Guernsey Dairy Farm is the offeree under a unilateral sales contract.Fresh is not notified of Guernsey's performance within a reasonable time.Fresh

Pine Mills Inc.and Quality Lumber Company enter into a contract for a sale of plywood to be delivered under a destination contract.This contract requires Pine Mills,the seller,to

Pavers Inc.contracts to buy some heavy equipment from Earthmovers,Inc.Before either party performs,Earthmovers sells its assets to Excavation Corporation.On learning of the sale,Pavers is concerned about its contract with Earthmovers.Pavers should

ABC Toy Store orders one hundred board games from Big Board Games Inc.When the games are delivered,they are all missing pieces.ABC rejects the shipment.To cure,Big Board must

Minerals Ltd.contracts to provide several manufacturers with tin.When a cartel of tin-producing countries suddenly embargoes future shipments of tin to Minerals so that it cannot fulfill its contracts,the distributor

Quest Outdoor Store orders RiverRun-brand kayaks from Sports Merchandise,Inc.Sports Merchandise mistakenly ships kayaks of the wrong size,which Quest rejects and returns via Trans-State Shipping Company.During the return,the kayaks are lost.The loss is suffered by

Elegant Carpets,Inc. ,and Fantastic Floors Stores enter into a contract for a sale of carpeting to be delivered under a shipment contract.This contract requires Elegant Carpets,the seller,to

Business Rental Corporation (BRC) and Cartage Trucking Company enter into a contract for a lease of ten hydraulic lifts.Under the perfect tender rule,BRC must ship or tender goods to the lessee that

Household Products Corporation sells Ideal-brand vacuum cleaners to Jolly Discount Stores and other retailers.Household will have an insurable interest in the cleaners as long as

Equipment Rentals Corporation (ERC) agrees to lease two backhoes to Dig & Fill Construction,Inc.Before any interest in the backhoes can pass from ERC to Dig & Fill,they must be

Clean Mouth Clinic offers to buy from Dental Supplies Company a certain quantity of floss and other items for a certain price.Dental can accept the offer by

Swift Trucking,Inc. ,and Trailer Rents Corporation are parties to an oral agreement for a one-year lease of six doublewides with payments totaling more than $40,000.They may satisfy the Statute of Frauds by