Question 1

Ed sells his car to Fran for $5,000, his bike to Gwen for $600, his game player to Holly for $200, and three shares of stock to Inez for $100. Article 2 of the UCC does not apply to the sale of

Accepted Answer

Article 2 of the UCC applies to transactions in goods, which are tangible and movable items. Stocks are considered securities, not goods, so Article 2 does not apply to the sale of stock.

Question 2

Brad buys a bulldozer from Construction Equipment Corporation, which he leases to Deep Digs, Inc. In this situation, the lessee is

Accepted Answer

The lessee is the party that leases the equipment from the owner. In this case, Deep Digs, Inc. is leasing the bulldozer from Brad, making them the lessee.

Question 3

Grains, Inc., agrees to sell to Harvest Bread Company a certain quantity of refined grains each week but many other terms are missing. In the case of a dispute, a court will presume

Accepted Answer

A court will presume whatever is reasonable in the absence of specific terms in a contract, aiming to fill in the gaps with fair and sensible terms that reflect the parties' intentions.

Question 4

Curt enters into a contract with Drivers Lease Company for a three-year lease of a car. This contract is subject to

Accepted Answer

Article 2A of the UCC governs leases of goods, including vehicles. Therefore, Curt's lease contract with Drivers Lease Company falls under Article 2A of the UCC.

Question 5

In a dispute over a sale involving a skateboard, Greg argues that as to this deal Hobby Shop, where Greg bought the board, is a merchant. A court may determine whether the shop is a merchant by assessing whether

Accepted Answer

A court will determine if the shop is a merchant by assessing if it holds itself out as having knowledge and skill particular to skateboards, which is the definition of a merchant under the Uniform Commercial Code (UCC).

Question 6

Dona offers to sell her used sofa, chair, coffee table, end table, and lamp to Erma for $700. Erma responds that she will pay that price if Dona's TV set is included. Neither party is a merchant. Their contract is formed according to

Accepted Answer

Erma's response is not a clear acceptance, but rather a counteroffer that adds a new term (the inclusion of the TV set). According to the mirror image rule, an acceptance must match the terms of the original offer without any changes or additions. Therefore, Dona's offer with the original terms still stands, and Erma has the option to either accept it or make a different counteroffer.

Question 7

Manufacturing Corporation orders twelve safety videos from Productions, Inc., which delivers the videos. This is most likely

Accepted Answer

This scenario describes a transaction where goods (safety videos) are delivered in exchange for payment, which constitutes a sale of goods.

Question 8

Dian, an agent for Expo Motors, Inc., writes a letter to Flynn on November 1 stating that she will sell him a 2017 Subaru Outback for $25,000 between November 1 and December 31. Dian's letter to Flynn is

Accepted Answer

A merchant's firm offer is a written and signed promise by a merchant to hold an offer open for a specified period, which is exactly what Dian's letter represents.

Question 9

Fresh Dairy, Inc., is the offeror and Gelato Ice Cream Company is the offeree under a unilateral sales contract in which Hector's Helado Corporation is also interested. Gelato is not notified of Fresh Dairy's performance within a reason-able time. Gelato

Accepted Answer

If Gelato is not notified of Fresh Dairy's performance within a reasonable time, Gelato may treat the offer as having lapsed. This is because in a unilateral contract, the offeror must provide notice of completion of performance within a reasonable time. If Gelato does not receive such notice, it can assume that the offer has lapsed.

Question 10

In contrast to standards that apply to consumers, the UCC imposes on merchants

Accepted Answer

The UCC (Uniform Commercial Code) imposes special rules on merchants, recognizing their expertise and higher level of responsibility in commercial transactions compared to ordinary consumers.

Question 11

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

Under the Uniform Commercial Code (UCC), an offer to buy goods can be accepted by either a promise to ship or by the prompt shipment of conforming or non-conforming goods.

Question 12

Sara and Tim enter into a contract for a sale of orchids. With respect to the specific contractual provisions set out in the UCC, these parties may

Accepted Answer

The Uniform Commercial Code (UCC) allows parties to a contract for the sale of goods to agree to the terms of their contract freely. This flexibility is designed to accommodate the vast array of needs and expectations in commercial transactions.

Question 13

Auto Body & Paint Company orders custom paint from Best Hues Inc., but Best does not deliver. Auto Body will probably be unable to enforce the agreement if the parties omitted

Accepted Answer

The answer of Auto Body & Paint Company orders custom...

Question 14

Marine Expeditions, Inc., pays Nate's Boats $4,000 to use an oceangoing vessel for a month. For the purposes of the UCC, this is

Accepted Answer

The payment to Nate's Boats for use of the vessel is a lease under the UCC, as the transaction involves the temporary transfer of a good (the vessel) for a specific period of time in exchange for payment. This is distinct from a sale or contract for services, as the focus is on the transfer of the physical asset rather than the provision of a specific service or product.

Question 15

Containers, Inc., sends its standard order form to Distribution Corporation to evidence a sale of packing materials. Distribution responds with its own standard purchase order form . Additional terms in the purchase order automatically become part of the contract unless

Accepted Answer

Under the Uniform Commercial Code (UCC), when both parties are merchants, additional terms in the acceptance or confirmation become part of the contract unless the offer expressly limits acceptance to the terms of the offer, the new terms materially alter the contract, or notification of objection to the new terms has already been given or is given within a reasonable time.

Question 16

Ferris is refinishing his kitchen floor and needs a floor sander to complete the job. Ferris's neighbor Gina suggests that he call Home Repair Rentals, Inc. Home Repair leases Ferris a floor sander. In this transaction, the lessor is

Accepted Answer

Home Repair Rentals, Inc. is the lessor in this transaction as they are the ones who are leasing out the equipment, in this case, the floor sander, to Ferris. Ferris is the lessee who is renting the equipment for his use. Gina is simply a neighbor who made a suggestion, but she does not have any role in the actual lease transaction.

Question 17

Refined Metals Company and Superior Fabrication, Inc., enter into a contract under which Refined agrees to deliver a certain quantity of sheet metal to Superior each month. The contract does not include a price term. In a suit between the parties over the price, a court will

Accepted Answer

When a contract does not include a price term, a court will determine a reasonable price based on various factors such as industry standards and previous dealings between the two parties. The court will aim to provide a fair price for both parties.

Question 18

Talk, Inc., offers to buy from Ultra Corporation 1,000 phones with certain features. Without notifying Talk, Ultra timely ships phones with fewer features. With respect to the offer, this shipment is an acceptance and

Accepted Answer

The shipment with fewer features is a breach of the offer because it does not conform to the terms of the original offer.

Question 19

Rice Lake Farms offers to sell Sensei Sushi Restaurants, Inc., five hundred bushels of rice. Sensei responds, "We agree to buy five hundred bushels only if the rice is Grade A quality." Without more, their contract is formed according to

Accepted Answer

The answer of Rice Lake Farms offers to sell Sensei...

Question 20

Medico Inc. enters into a contract to sell medical supplies to New Hospital Corporation, which sells some of the items to Physicians Clinic, which later sells them to Oscar, a patient and consumer. Article 2 of the UCC applies to the sales transactions between

Accepted Answer

Article 2 of the UCC applies to the sales transactions between Medico, New Hospital, and Physicians Clinic because they are all merchants.

Quiz 17: Introduction to Sales and Lease Contracts