Question 1

To be characterized as a "good" under the UCC, an item of property must be movable.

Accepted Answer

According to UCC Section 2-105, a "good" refers to "all things...which are movable at the time of identification to the contract for sale." Therefore, for an item of property to be considered a good under the UCC, it must be movable.

Question 2

Under the UCC, parties to sales and lease contracts are free to establish whatever terms they wish.

Accepted Answer

The UCC generally follows the principle of freedom of contract, allowing parties to establish their own terms, as long as they are not illegal or unconscionable. However, there are certain provisions in the UCC that may limit or override certain terms.

Question 3

According to the UCC, one open term will cause a sales contract to fail for indefiniteness.​

Accepted Answer

The UCC allows for open terms in a sales contract as long as the parties intended to make a contract and there is enough information to determine the missing terms or a method for determining the missing terms is provided. Therefore, one open term will not necessarily cause a sales contract to fail for indefiniteness.

Question 4

The UCC imposes some different rules on merchants.

Accepted Answer

The UCC (Uniform Commercial Code) does impose some different rules and regulations specifically for merchants who engage in commercial transactions. These rules include different standards for warranties, contract formation, and other aspects of commercial transactions.

Question 5

The UCC imposes special business standards on casual and inexperienced sellers and buyers.

Accepted Answer

The UCC applies to all business transactions regardless of the experience or expertise of the parties involved. It does not impose special standards on casual or inexperienced buyers and sellers.

Question 6

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

Accepted Answer

For an item to be characterized as a "good" under the UCC (Uniform Commercial Code), it must be tangible and movable property, such as products, equipment, and inventory. Intangible items, such as services and intellectual property, are not considered goods under the UCC.

Question 7

Goods associated with real estate never fall within the scope of UCC Article 2.

Accepted Answer

Goods associated with real estate, such as fixtures and property improvements, can be classified and sold as goods under UCC Article 2.

Question 8

A firm offer by a merchant may be oral.

Accepted Answer

A firm offer by a merchant must be in writing to be enforceable under the Uniform Commercial Code (UCC).

Question 9

When no delivery terms are specified in a contract for a sale of goods, there is no basis for determining a remedy.

Accepted Answer

When no delivery terms are specified in a contract for a sale of goods, the Uniform Commercial Code (UCC) provides default delivery terms that can be used to determine a remedy in case of breach of contract. Therefore, there is a basis for determining a remedy even if no delivery terms are specified.

Question 10

Under the UCC, if a contract for a sale of goods does not specify the quantity, a court will objectively determine what is a reasonable quantity.

Accepted Answer

Under the UCC, a contract for the sale of goods must specify the quantity term to be enforceable; without a specified quantity, the contract is generally considered too indefinite to enforce.

Question 11

Goods associated with real estate often fall within the scope of Article 2.

Accepted Answer

Article 2 of the Uniform Commercial Code deals with the sale of goods, which includes tangible personal property. While real estate itself is not considered goods, certain items such as fixtures (such as lighting fixtures or HVAC systems) that are permanently attached to the real estate may be considered goods and fall within the scope of Article 2.

Question 12

A contract for the sale of minerals is considered to be a contract for the sale of goods if the severance is to be made by the seller.

Accepted Answer

According to the Uniform Commercial Code (UCC), a contract for the sale of minerals is considered to be a contract for the sale of goods if the seller is responsible for the severance of the minerals. Therefore, option A is true.

Question 13

Intangible property has conceptual existence and thus comes under Article 2.

Accepted Answer

Intangible property does not have physical existence and therefore falls outside the scope of Article 2. It may be classified as intellectual property and subject to different laws and regulations.

Question 14

The UCC views the entire "commercial transaction for the sale of and payment for goods" as a single legal occurrence.

Accepted Answer

The UCC (Uniform Commercial Code) does indeed view the entire "commercial transaction for the sale of and payment for goods" as a single legal occurrence. This means that all aspects of the transaction, including the offer, acceptance, payment, delivery, warranties, and any other terms agreed upon by the parties involved, are considered as part of a single contract under the UCC. This unified approach simplifies and clarifies the legal framework for commercial transactions involving the sale of goods.

Question 15

UCC Article 2 applies to sales transactions between all buyers and sellers.

Accepted Answer

UCC Article 2 specifically applies to sales transactions between buyers and sellers of goods (i.e. tangible, movable property). It does not apply to services, real estate transactions, or other types of contracts.

Question 16

Under the UCC, good faith means honesty in fact and the observance of reasonable commercial standards of fair dealing in the trade.

Accepted Answer

Good faith is defined in Section 1-201(20) of the UCC as "honesty in fact and the observance of reasonable commercial standards of fair dealing in the trade."

Question 17

A merchant is a person who deals in goods of the kind involved in the sales contract or who holds herself or himself out as having skill or knowledge peculiar to the practices or goods being purchased or sold.

Accepted Answer

A merchant is defined as a person who deals in goods of the kind involved in the sales contract or who holds herself or himself out as having skill or knowledge peculiar to the practices or goods being purchased or sold.

Question 18

A lessor is a party who transfers the right to the possession and use of goods under a lease.

Accepted Answer

This is the correct definition of a lessor.

Question 19

A lessor is a party who acquires a right to the possession and use of goods under a lease.

Accepted Answer

A lessor is the party who grants the right to possession and use of goods under a lease, not the party who acquires it.

Question 20

If the parties to a contract for a sale of goods have not agreed on a price, a court will determine a reasonable price at the time for delivery.

Accepted Answer

Under the Uniform Commercial Code (UCC) §2-305, if the parties to a contract for sale of goods fail to agree on the price, the court will determine a reasonable price at the time for delivery.

Quiz 15: The Formation of Sales and Lease Contracts