Question 1

Jason contracts with Golf Carts Unlimited, Inc. to buy five golf carts. The contract lists the five carts as GC001, GC002, GC003, GC004, GC005. Identification
A) requires that Jason verify his identity to take possession of the carts.
B) has taken place.
C) cannot take place until the contract is reviewed by a court.
D) will take place only when Jason pays for the golf carts.

Accepted Answer

The contract has listed the specific identification of the five golf carts, thus identification has taken place.

Question 2

Community Construction Corporation offers to buy from Solid Cement Company a certain quantity of cement for a certain price. Solid can accept the offer by
A) doing nothing.
B) promising to ship or promptly shipping the cement.
C) promising to ship the cement only.
D) promptly shipping the cement only.

Accepted Answer

Solid can accept the offer by either promising to ship the cement or promptly shipping the cement. These actions indicate that Solid has accepted the offer and agreed to sell the specified quantity of cement to Community Construction Corporation at the offered price. Doing nothing or promising to ship only would not be sufficient to accept the offer.

Question 3

Perfect Potato Chip Company makes an offer that Snack Foods Corporation would like to accept. Under the "mirror image rule" relating to offer and acceptance, an acceptance
A) may include additional terms not contained in the offer so long as they do not materially alter the agreement.
B) may include additional terms not contained in the offer that will become part of the agreement if the offeror does not object within a reasonable period of time.
C) must include only those terms and conditions contained in the offer.
D) may contain additional terms as long as all parties agree to the additional terms.

Accepted Answer

The mirror image rule requires that the acceptance must mirror the terms of the offer. It means that the acceptance must contain only the terms and conditions that were contained in the offer. Any additional terms or conditions would constitute a counteroffer, which would terminate the original offer and create a new offer. Therefore, option C is the correct answer.

Question 4

Grace purchases three tons of fine merino wool on behalf of Woolen Creations. Woolen Creations wants the wool to remain in the warehouse where it is being stored until it is needed. Grace makes an offer for the wool on Monday. The offer is accepted on Tuesday. The warehouser gives Woolen Creations a warehouse receipt on Wednesday. Woolen Creations picks up the wool from the warehouse three months after the sale. Title for the wool passed to Woolen creations
A) on Monday.
B) on Tuesday.
C) on Wednesday.
D) three months after the sale.

Accepted Answer

According to the question, the warehouse receipt was given to Woolen Creations on Wednesday, which is an indication that the seller has fulfilled their obligations, and title has passed to the buyer. Therefore, the correct answer is C, on Wednesday.

Question 5

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 governs
A) the sale of any of the property evidenced by a writing.
B) the entire deal, including the marketer's services.
C) the sale of the furnishings priced at $500 or more.
D) the sale of the land and the building.

Accepted Answer

The UCC Statute of Frauds specifically applies to the sale of goods, and furnishings priced at $500 or more would fall under this category as goods. The UCC does not apply to real estate transactions or services, such as the sale of land, buildings, or marketing services.

Question 6

Nature's Products, Inc., sends its standard order form to Interbusiness Distribution Corporation (IDC) to evidence a sale of packing materials. IDC responds with its own standard purchase order form. Additional terms in the purchase order automatically become part of the contract unless
A) the terms materially alter the original contract.
B) the original offer expressly required acceptance of its terms.
C) the offeror objects to the new terms within a reasonable time.
D) any of the choices.

Accepted Answer

The answer of Nature's Products, Inc., sends its standard order...

Question 7

Equipment Rental Corporation and Floodlights, Inc., are parties to an oral agreement for a lease of goods with payments in excess of $10,000. They may satisfy the Statute of Frauds by
A) mutually agreeing not to commit fraud.
B) restating the terms in a phone call.
C) setting out the terms in an e-mail.
D) shaking hands on the deal.

Accepted Answer

The best choice to satisfy the Statute of Frauds for an oral lease agreement with payments in excess of $10,000 would be to set out the terms in an e-mail. This provides a written record of the agreement and the terms of the lease. Mutually agreeing not to commit fraud and shaking hands on the deal do not satisfy the Statute of Frauds, and restating the terms in a phone call may not provide sufficient evidence of the agreement.

Question 8

A contract between Fresh Fruit Corporation and Green Grocer, Inc., requires Fresh Fruit to deliver goods to Green Grocer's place of business. This is
A) a bill of lading.
B) a destination contract.
C) a shipment contract.
D) a warehouse receipt.

Accepted Answer

A destination contract is a type of contract where the seller agrees to deliver the goods to a particular destination specified in the contract. In this scenario, Fresh Fruit Corporation is required to deliver goods to Green Grocer's place of business, therefore it is a destination contract.

Question 9

Rita, the manager of the State University (SU) soccer team, orally agrees to lease a certain number of specially made SU banners from Top Banners, Inc. This lease is enforceable only if Top has made a substantial start on making the banners and
A) Rita agreed to the lease on behalf of the SU soccer team.
B) SU does not have other, similar banners available.
C) the banners are not suitable for others in the course of Top's business.
D) the soccer season has not ended and SU goes to the finals.

Accepted Answer

The answer of Rita, the manager of the State University...

Question 10

Raul agrees to ship to Ben one hundred ceiling fans for $5,000. Raul initials his notes of the deal, which include the terms, and files the notes in his office. Ben initials his own notes of the deal, which include the terms, and files the notes in his office. Raul fails to ship the fans. Against Raul, as a contract, the deal is
A) enforceable, because under the UCC a contract need not written.
B) enforceable, because Raul's initialed notes are a sufficient writing.
C) enforceable, because Ben's initialed notes are a sufficient writing.
D) not enforceable.

Accepted Answer

According to the UCC's statute of frauds, contracts for the sale of goods over $500 must be in writing. In this case, both parties initialed their own notes of the deal, which include the terms, and filed them in their respective offices. This constitutes a sufficient writing under the UCC, making the contract enforceable.

Question 11

Peter, an agent for Zippy Cars, Inc., writes a letter to Cassandra on March 1 stating that he will sell her a 2011 Suburu Outback for $20,000 between March 1 and April 30. Peter's letter to Cassandra is
A) a firm offer.
B) an acceptance.
C) a bilateral contract.
D) a breach.

Accepted Answer

A firm offer is a definite offer or a promise to keep an offer open for a certain period of time. In this case, Peter has made a specific offer to Cassandra to sell her a 2011 Suburu Outback for a specific price within a specific time frame. This offer is certain, definite, and gives Cassandra the option to accept it within the given period. Therefore, Peter's letter to Cassandra is a firm offer.

Question 12

Mountaineer Sales, Inc., is the offeror and Camping Goods Corporation is the offeree under a unilateral sales contract in which Forest Recreation Products Company is also interested. Mountaineer is not notified of Camping's performance within a reasonable time. Mountaineer
A) may treat the offer as having lapsed.
B) must assume that Camping has started to perform.
C) must contact Camping.
D) must contract with Forest.

Accepted Answer

If the offeree does not notify the offeror of their acceptance within a reasonable time, the offer lapses. Therefore, Mountaineer may treat the offer as having lapsed.

Question 13

Bill orders 1,000 nails from Super Hardware, Inc. Super Hardware keeps its nails in packages of 100,000. Bill and the agent for Super Hardware both sign the contract for the sale of the nails on Monday. The agent separates 1,000 nails on Wednesday. The agent delivers the nails to Bill on Thursday morning, and Bill pays for the nails on Friday. Identification of the nails took place on
A) Monday.
B) Wednesday.
C) Thursday.
D) Friday.

Accepted Answer

The answer of Bill orders 1,000 nails from Super Hardware,...

Question 14

Fresh Produce, Inc., and Great Grocery Stores dispute the interpretation of an ambiguous phrase in their contract. In a suit between the parties to construe the contract, a court may accept evidence of
A) consistent additional terms only.
B) consistent additional terms and contradictory terms only.
C) contradictory terms only.
D) anything extrinsic to the contract.

Accepted Answer

The answer of Fresh Produce, Inc., and Great Grocery Stores...

Question 15

Big Beef, Inc. raises calves to sell. Big Beef breeds its cows in April, and the cows calve in February of the following year. In January Andrea contracts with Big Beef to buy fifty calves. Identification takes place in
A) January, when the contract is signed.
B) April, when the calves are conceived.
C) February, when the calves are born.
D) a reasonable period of time.

Accepted Answer

The answer of Big Beef, Inc. raises calves to sell....

Question 16

Big Red Drinks, Inc. contracts to buy two tons of cranberries from Super Fruits, Inc. The contract states that Super Fruits is required to ship the cranberries to Big Red Drinks by Speedy Wind Air Freight. The contract is
A) a bill of lading.
B) a destination contract.
C) a shipment contract.
D) a warehouse receipt.

Accepted Answer

The contract is a shipment contract because it requires Super Fruits to ship the cranberries to Big Red Drinks.

Question 17

Trend-Rite Clothiers, Inc., sells t-shirts to Brand Name Stores, Inc., under an existing contract. When textile costs increase, Brand agrees to a price increase, but later wants to cancel the contract. Brand may
A) cancel the contract immediately.
B) cancel the contract only after accepting a final shipment.
C) cancel the contract only on reasonable notice.
D) not cancel the contract.

Accepted Answer

The answer of Trend-Rite Clothiers, Inc., sells t-shirts to Brand...

Question 18

Megan, an agent for a department store, orders one hundred dresses from Sal's Clothing Shop for the Spring Blossom Sale. There is no specific agreement in the sale contract indicating when title will pass to the department store. The title will pass to the department store when
A) Megan signs the contract.
B) Megan and the Sal's Clothing Shop agent sign the contract.
C) Sal's Clothing Shop physically delivers the dresses to the department store.
D) Megan pays Sal's Clothing Shop for the dresses.

Accepted Answer

The passing of title to the department store is determined by the Uniform Commercial Code (UCC), which states that title passes from the seller to the buyer when the seller physically delivers the goods to the buyer. Therefore, title will pass to the department store when Sal's Clothing Shop physically delivers the dresses to the department store.

Question 19

Gail enters into a contract with Hi-Price Appliances, Inc. In a suit between the parties over payment under the contract, Gail claims that a certain clause is unconscionable. If the court agrees, it may
A) enforce, limit, or refuse to enforce the contract or the disputed clause.
B) enforce the contract without the disputed clause only.
C) limit the application of the disputed clause only.
D) refuse to enforce the entire contract only.

Accepted Answer

If a court finds a contract or a specific clause to be unconscionable, it has the discretion to enforce, limit, or refuse to enforce the contract or the disputed clause. The court may also alter or modify the terms of the contract to an extent in order to make it fair and reasonable. Therefore, option A is the best choice.

Question 20

Jackson owns an antiques store. He sells a grand piano to Fred for $5,000, a old jukebox to Sam for $499, an antebellum chest of drawers to Josephine for $659 and a gold ring to Wendy for $999. Which of Jackson's sales must be in writing to be enforceable?
A) The grand piano only
B) The grand piano and the gold ring only
C) The grand piano, the chest of drawers and the gold ring only
D) The grand piano, the chest of drawers, the jukebox and the gold ring

Accepted Answer

The answer of Jackson owns an antiques store. He sells...

Quiz 15: The Formation of Sales and Lease Contracts

Jason contracts with Golf Carts Unlimited, Inc. to buy five golf carts. The contract lists the five carts as GC001, GC002, GC003, GC004, GC005. Identification

Community Construction Corporation offers to buy from Solid Cement Company a certain quantity of cement for a certain price. Solid can accept the offer by

Perfect Potato Chip Company makes an offer that Snack Foods Corporation would like to accept. Under the "mirror image rule" relating to offer and acceptance, an acceptance

Nature's Products, Inc., sends its standard order form to Interbusiness Distribution Corporation (IDC) to evidence a sale of packing materials. IDC responds with its own standard purchase order form. Additional terms in the purchase order automatically become part of the contract unless

Equipment Rental Corporation and Floodlights, Inc., are parties to an oral agreement for a lease of goods with payments in excess of $10,000. They may satisfy the Statute of Frauds by

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

Rita, the manager of the State University (SU) soccer team, orally agrees to lease a certain number of specially made SU banners from Top Banners, Inc. This lease is enforceable only if Top has made a substantial start on making the banners and

Peter, an agent for Zippy Cars, Inc., writes a letter to Cassandra on March 1 stating that he will sell her a 2011 Suburu Outback for $20,000 between March 1 and April 30. Peter's letter to Cassandra is

Mountaineer Sales, Inc., is the offeror and Camping Goods Corporation is the offeree under a unilateral sales contract in which Forest Recreation Products Company is also interested. Mountaineer is not notified of Camping's performance within a reasonable time. Mountaineer

Fresh Produce, Inc., and Great Grocery Stores dispute the interpretation of an ambiguous phrase in their contract. In a suit between the parties to construe the contract, a court may accept evidence of

Big Beef, Inc. raises calves to sell. Big Beef breeds its cows in April, and the cows calve in February of the following year. In January Andrea contracts with Big Beef to buy fifty calves. Identification takes place in

Big Red Drinks, Inc. contracts to buy two tons of cranberries from Super Fruits, Inc. The contract states that Super Fruits is required to ship the cranberries to Big Red Drinks by Speedy Wind Air Freight. The contract is

Trend-Rite Clothiers, Inc., sells t-shirts to Brand Name Stores, Inc., under an existing contract. When textile costs increase, Brand agrees to a price increase, but later wants to cancel the contract. Brand may

Megan, an agent for a department store, orders one hundred dresses from Sal's Clothing Shop for the Spring Blossom Sale. There is no specific agreement in the sale contract indicating when title will pass to the department store. The title will pass to the department store when

Gail enters into a contract with Hi-Price Appliances, Inc. In a suit between the parties over payment under the contract, Gail claims that a certain clause is unconscionable. If the court agrees, it may

Jackson owns an antiques store. He sells a grand piano to Fred for $5,000, a old jukebox to Sam for $499, an antebellum chest of drawers to Josephine for $659 and a gold ring to Wendy for $999. Which of Jackson's sales must be in writing to be enforceable?