Question 1

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 substan?tial start on making the banners and

Accepted Answer

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

Question 2

Fact Pattern 17-1 
Olga enters into a contract to buy a refrigerator from a Prairie States Appliance store with the price to be paid in monthly installments. After thirty-six months of payments, Olga has paid more than twice the price of a similar stove. Eighteen payments remain due under the contract.
-Refer to Fact Pattern 17-1. Olga files a suit against Prairie States, claiming that their contract is so unfair and one sided that it would be unreasonable to enforce it. Olga is asserting

Accepted Answer

Olga is asserting the doctrine of unconscionability, which refers to a contract that is so one-sided and unfair that it would be unreasonable to enforce it. Olga's claim is based on the fact that she has paid more than twice the price of a similar refrigerator and still owes eighteen more payments. This is clearly an unfair and unconscionable contract.

Question 3

Fact Pattern 17-1 
Olga enters into a contract to buy a refrigerator from a Prairie States Appliance store with the price to be paid in monthly installments. After thirty-six months of payments, Olga has paid more than twice the price of a similar stove. Eighteen payments remain due under the contract.
-Refer to Fact Pattern 17-1. Under the UCC, the court can evaluate the contract to determine whether it was unreasonably unfair and one sided

Accepted Answer

The UCC allows for a court to evaluate a contract for unconscionability at the time it was made, which would be the most appropriate time to determine whether the contract was unreasonably unfair and one-sided.

Question 4

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

Accepted Answer

To satisfy the Statute of Frauds for a lease of goods with payments in excess of $10,000, the terms of the agreement must be in writing. While shaking hands on the deal or restating the terms in a phone call can indicate an oral agreement, they will not satisfy the requirement for a written agreement. The best option is to set out the terms in an e-mail, as this provides a clear record of the agreement and is easily accessible by both parties.

Question 5

Toro, S.A., which is based in Mexico, enters into a contract for the purchase of portable livestock fencing from United Fencing Company, which is based in the United States. This contract is governed by

Accepted Answer

Since this is an international contract for the sale of goods, the United Nations Convention on Contracts for the International Sale of Goods (CISG) is the most appropriate choice to govern the contract, as it is designed to create a uniform framework for international sales contracts between parties from different countries. The UCC and the laws of each country are generally only applicable to domestic sales.

Question 6

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?

Accepted Answer

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

Question 7

Secure Courier, Inc., has a requirements contract with Petro Distribution Corporation that obligates Petro to supply Secure with all the gasoline it needs for its delivery vehicles for one year at $2.30 per gallon. A clause inserted in small print in the contract by Secure, and not noticed by Petro, states, "The buyer reserves the right to reject any shipment for any reason without liability." For six months, Secure orders and Petro delivers under the contract without any controversy. Then, because of a war in the Middle East, the price of gasoline to Petro increases substantially. Petro tells Secure it cannot possibly fulfill their contract unless Secure agrees to pay $2.50 per gallon. Secure, in need of the gasoline, agrees in writing to modify the contract. Later that month, Secure learns it can buy gasoline at $2.40 per gallon from Refined Oil Company. Secure refuses delivery of its most recent order from Petro, claiming, first that the contract allows it to do so without liability, and second, that it is required to pay only $2.30 per gallon if it accepts the delivery. Discuss Secure's contentions.

Accepted Answer

The answer of Secure Courier, Inc., has a requirements contract...

Question 8

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

Accepted Answer

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

Question 9

Bert's Bagels & Nosh, Inc., and other bakeries refer to a "baker's dozen" as con?sisting of a collection of thirteen baked goods. This is an example of

Accepted Answer

The practice of referring to a baker's dozen as consisting of 13 baked goods is a common usage of trade among bakeries.

Question 10

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

Accepted Answer

If a court determines that a clause in a contract is unconscionable, it has the power to enforce, limit, or refuse to enforce the contract or the disputed clause. This means that the court may strike the clause in question, modify it, or even declare the entire contract void depending on the circumstances of the case. Therefore, choice A is the most appropriate answer.

Question 11

Key of G Products, Inc., offers to sell to Harmony Company one hundred MP3 players at $50 a piece, subject to certain specific delivery dates. Harmony replies with a signed purchase order that reads, "Accept your of?fer for 100 I-appliances at $50 each. Must be delivered to our ware?house." Key of G does not respond or deliver the goods. Harmony files a suit for breach of contract, to which Key of G answers that there is no contract because Harmony's purchase order contained additional terms and is not signed by Key of G. Can Harmony recover? Explain.

Accepted Answer

The answer of Key of G Products, Inc., offers to...

Question 12

Raul agrees to ship to Ben one hundred ceil?ing fans for $5,000. Raul ini?tials his notes of the deal, which in?clude 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

Accepted Answer

Under the UCC, contracts for the sale of goods worth $500 or more must be in writing. However, a writing can consist of any "intentional reduction to tangible form" and can include notations made by the parties themselves. In this case, both parties initialed notes of the deal, which included the essential terms, and filed them in their respective offices. Therefore, Raul's initialed notes constitute a sufficient writing and the deal is enforceable against him.

Quiz 17: The Formation of Sales and Lease Contracts